Entries for Discounting Notes Payable

Swain Enterprises issues a 60-day note for $800,000 to Hill Industries for merchandise inventory. Hill Industries discounts the note at 6%.

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

a. Journalize Swain Enterprises' entries to record:

the issuance of the note.

the payment of the note at maturity.

b. Journalize Hill Industries' entries to record:

the receipt of the note.

the receipt of the payment of the note at maturity.