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Ex 7.6 Notes payablediscount basis On August 1, 2019, Colombo Co.s treasurer signed a note promising to pay $2,400,000 on December 31, 2019. The proceeds
Ex 7.6 Notes payablediscount basis On August 1, 2019, Colombo Co.s treasurer signed a note promising to pay $2,400,000 on December 31, 2019. The proceeds of the note were $2,340,000.
Required:
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Calculate the discount rate used by the lender.
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Calculate the effective interest rate (APR) on the loan.
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Use the horizontal model (or write the journal entry) to show the effects of
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Signing the note and the receipt of the cash proceeds on August 1, 2019.
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Recording interest expense for the month of September.
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Repaying the note on December 31, 2019.
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