Non-Interest-Bearing Notes Payable On October 1, 2010, RatkowskiInc. borrowed $18,000 from Second National Bank by issuing a

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Non-Interest-Bearing Notes Payable On October 1, 2010, RatkowskiInc. borrowed $18,000 from Second National Bank by issuing a 12-month note. The bank discounted the note at 9%.

Required

1. Identify and analyze the effect of the issuance of the note.

2. Identify and analyze the effect of the accrual of interest on December 31, 2010.

3. Identify and analyze the effect of the payment of the note on October 1, 2011.

4. What effective rate of interest did Ratkowski pay?

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Using Financial Accounting Information The Alternative to Debits and Credits

ISBN: 978-1133161646

7th Edition

Authors: Gary A. Porter, Curtis L. Norton

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Question Posted: Jan 12, 2012 02:15 AM

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Non-Interest-Bearing Notes Payable On October 1, 2010, RatkowskiInc. borrowed $18,000 from Second National Bank by issuing a

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Using Financial Accounting Information The Alternative to Debits and Credits

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