On november 1 2013 ziegler products issued a 200000 9-month

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On November 1, 2013, Ziegler Products issued a $200,000, 9-month, noninterest-bearing note to the bank. Interest was discounted at a 12% discount rate.

Required:

1. Prepare the appropriate journal entry by Ziegler to record the issuance of the note.

2. Determine the effective interest rate.

3. Suppose the note had been structured as a 12% note with interest and principal payable at maturity.

Prepare the appropriate journal entry to record the issuance of the note by Ziegler.

4. Prepare the appropriate journal entry on December 31, 2013, to accrue interest expense on the note described in number 3 for the 2013 financial statements.

Show all work

Date

General Journal

Debit

Credit

























































































































Reference no: EM13485573

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