Question

on october 1, eder fabrication borrowed $60 million and issued a nine-month, 12% promissory note. interest was payable at maturity. prepare the journal entry for the issuance of the note and the appropriate adjusting entry for the note at december 31, the end of the reporting period.

Answer 1

55,110,929 in cash; debit

55,110,929 in credit notes

Promissory note with discounted interest to be recorded

debt 1.583.741,77 in interest

Credit Card Amount Due: 1.583.741,77 Note

—to record interest that has accrued on a payable note —

What is interest ?

The cost of borrowing money is known as interest, and it is typically stated as a percentage, such as an annual percentage rate (APR). The rate of inflation, the length of the loan, the availability of funds, and the risk of default are important variables that determine interest rates. Ownership in a business can alternatively be expressed as interest.

The sum of money paid for using someone else's money is known as interest. The $20 you earned this year on your savings account is an example of interest. The $2000 in interest you paid on your home loan this year is an example of interest.

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