On June 3, 2016, Fidelity State Company received a $4,800, 45-day, 10 percent note from Horace Coe,

Question:

On June 3, 2016, Fidelity State Company received a $4,800, 45-day, 10 percent note from Horace Coe, a customer whose account was past due.

1. Record in the general journal receipt of the note.

2. Give the entry in general journal form to record the discounting of this note receivable on June 18 at the Second State Bank and Trust. The bank charged a discount rate of 12 percent.

Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...