On May 16, 2016, Reliable Company received a 90-day, 9 percent, $9,200 interest-bearing note from White Company in settlement of White's past-due account. On June 30, Reliable discounted this note at Fargo Bank and Trust. The bank charged a discount rate of 14 percent. On August 15, Reliable received a notice that White had paid the note and the interest on the due date.

Prepare the entries in general journal form to record these transactions. (Use 360 days a year. Round your intermediate calculations and final answers to 2 decimal places.)

Transaction List:

1. Record entry for a 90-day, 9% note accepted for past-due account.

2. Record the entry for discounting the 90-day note at 14%.

3. Record payment of discounted note receivable.

Analyze:

If the company prepared a balance sheet on July 31, 2016, how should Notes ReceivableDiscountedbe presented on the statement?

Reliable Company

Balance Sheet

July 31, 2016

Notes Receiveable: __________

Less: Notes Receivable Discounted: ________________