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Dawkins Co. issued a $60,000 face value discount note to First Bank on June 1, 2013. The note had a 6 percent discount rate and a one year term to maturity.
Required:
Prepare general journal entries for the following transactions:
a. The issuance of the note on June 1, 2013.
b. The adjustment for accrued interest at the end of the year, December 31, 2013.
c. Recording interest expense for 2014 and repaying the principal on May 31, 2014.
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