Entries for Discounting Notes Payable

Ramsey Company issues an $456,000, 60-day note to Buckner Company for merchandise inventory. Buckner discounts the note at 7%.

Assume a 360-day year. For a compound transaction, if an amount box does not require an entry, leave it blank.

a. Journalize Ramseys entries to record:

1. the issuance of the note.
2. the payment of the note at maturity.

1.	Options: Cash, Interest Revenue, Merchandise Inventory, Notes Payable, or Notes Receivable	____	____
	Options: Accounts Payable, Cash, Interest Expense, Interest Revenue, or Notes Receivable	____	____
	Options: Cash, Interest Expense, Interest Revenue, Notes Payable, or Notes Receivable	____	____
2.	Options: Cash, Interest Expense, Interest Revenue, Notes Payable, or Notes Receivable	____	____
	Options: Cash, Interest Expense, Interest Revenue, Notes Payable, or Notes Receivable	____	____

b. Journalize Buckners entries to record:

1. the receipt of the note.
2. the receipt of the payment of the note at maturity.

1.	Options: Cash, Interest Revenue, Merchandise Inventory, Notes Payable, or Notes Receivable	____	____
	Options: Accounts Payable, Cash, Interest Expense, Interest Revenue, or Notes Receivable	____	____
	Options: Cash, Interest Expense, Interest Revenue, Notes Payable, or Notes Receivable	____	____
2.	Options: Cash, Interest Expense, Interest Revenue, Notes Payable, or Notes Receivable	____	____
	Options: Cash, Interest Expense, Interest Revenue, Notes Payable, or Notes Receivable	____	____