Non-Interest-Bearing Notes Payable On October 1, 2010, Ratkowski Inc. borrowed $18,000 from Second National Bank by issuing
Question:
Non-Interest-Bearing Notes Payable On October 1, 2010, Ratkowski Inc. 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: 9780538452748
7th Edition
Authors: Curtis L. Norton, Gary A. Porter
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