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Edit View History Bookmarks Window Help 26% D Sat 5:12 PM ae edugen WileyPLUS WileyPLUS WileyPLUS I 1?elp l ContactUs [ L Kieso, Intermediate Accounting, 16e INTERMEDIATE ACCOUNTING 1 & (310/31M dy & Practice Gradebook ORION Downloadable eTextbook Assignment CALCULATOR FULL SCREEN PRINTER VERSION BACK URCES Brief Exercise 14-11 Teal Corporation issued a 4-year, $79,000, zero-interest-bearing note to Brown Company on January 1, 2017, and received cash of $52,040. The implicit interest rate is 11%. Prepare Teal\'s journal entries for (a) the January 1 issuance and (b) the December 31 recognition of interest. (Round answers to o decimal places, e.9: 38,5-43. no antry is required, select \"No Entry\" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entored. Do not indent manually.) Date Account Titles and Explanation Debit 12 (a) January 1, 2017 (b) December 31, 2017 Click if you would like to Show Work for this question: Open Show Wark Question Attempts: 0 of 4 used SAVE FOR LATER SUBMIT ANSWER F7 908AE

Solution

No. Date Account Titles and Explanation Debit Credit (a) January 1, 2017 Cash $       52,040 Discount on notes payable $       26,960 Notes Payable $       79,000 (To record purchase of equipment) (b) December 31, 2017 Interest Expense $         5,724 Discount on notes payable $         5,724 (To record interest expense) Working: a. Interest Expense for 1st year = Beginning Balance x Market interest rate = $       52,040 x 11% = $         5,724