Entries for Discounting Notes Payable

Ramsey Company issues an $564,000, 30-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:

the issuance of the note.

the payment of the note at maturity.

1.
2.

b. Journalize Buckners entries to record:

the receipt of the note.

the receipt of the payment of the note at maturity.

1.
2.