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Edit View History Bookmarks Window Help ??25% D Sat 5:13 PM a edugen.wileyplus.com WileyPLUS WileyPLUS: MyWlleyPLUs I Help i Contact usI US Kieso, Intermediate Accounting, 1e INTERMEDIATE ACCOUNTING 1 & (31°/311 Practice Gradebook ORION Downloadable eTextbook ssignment CALCULATOR FULL SCREEN PRINTER VERSION BACK Brief Exercise 14-12 requires annual interest payments each December 31. The market rate of interest for a note of similar risk is 11%. Prepare Bramble\'s journal entries for (a) the January 1 issuance and (b not indent manually.) corporation issued a 4-year, $39,000 4% note to Greenbush Company on January 1, 2017, and received a computer that normally sells for $30,530. The note ) the December 31 interest. (Round answers to o decimal places, e.g. 38,548. Ir no entry is select \"No Entry\" for the account titles and enter o for the amounts. Credit account titles are automat ically indented when amount is entered. D Date Account Tebles and splanatio (a) January 1, 2017 (b) December 31, 2017 Click if you would like to Show Work for this question: Open Show Work y Study 20 ao F F5 F10 0

Solution

No. Date Account Titles and Explanation Debit Credit (a) January 1, 2017 Computer $       30,530 Discount on notes payable $         8,470 Notes Payable $       39,000 (To record purchase of equipment) (b) December 31, 2017 Interest Expense $         3,358 Cash $         1,560 Discount on notes payable $         1,798 (To record interest expense) Working: a. Interest Expense for 1st year = Beginning Balance x Market interest rate = $       30,530 x 11% = $         3,358 b. Interest paid in cash = Notes Payable x Notes rate = $       39,000 x 4% = $         1,560 c. Discount amortised = $         3,358 - $    1,560 = $         1,798