What the balance in the discount account

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Question - On August 1, 20X1, SEA Ltd. borrowed money by issuing a one-year non-interest-bearing note with a stated maturity amount of $90,000. Currently, interest rates are at 4%. No amount is paid on the note until its maturity date in 20X2. The company accounts for the discount on its notes payable in a separate account.

1 - What the amount of interest expense on the note that the company will record for the year ending December 31, 20X1.

2 - What the balance in the discount account that will be reported on the company's statement of financial position on December 31, 20X1.

Reference no: EM132867743

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