Respuesta :
Answer:
Cash.........................Dr $2,855
Discount on notes payable $145
Notes payable $3,000
(Notes issued at discount)
Explanation:
Zero interest note, as the name suggests are issued with no interest charged on amount due. As such, notes are issued at a price that is lesser than face value. Difference between face value and present value of note represent discount on notes payable.
Journal entry to record issue of notes payable:
Particulars Debit Credit
Cash $2,855
Discount on notes payable $145
Notes payable $3,000
(Notes issued at discount)
Cash is debited with present value of note of $2,855 as notes are issued less than face value.
