Straight-line amortization of the discount

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Reference no: EM13154612

On August 31st, Jenkins Co. partially refunded $180,000 of its outstanding 10% note payable, made one year ago to Arma State Bank by paying $180,000 plus $18,000 interest, having obtained the $198,000 by using $52,400 cash and signing a new one year $160,000 note discouted at 9% by the bank.

Instructions:

(1) Make the entry to record the partial refunding, Assume Jenke Co.makes reversing entries when appropriate.

(2) Prepare the adjusting entry at December 31, assuming straight-line amortization of the discount.

Reference no: EM13154612

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