Montana Minerals sold coal to Beta Electric, receiving a 6-month - 13410

Solution Posted by
yousafbhutta

yousafbhutta

Rating : (28)C
Solution Detail
Price: $1.00
  • From: Business,
  • Posted on: Sun 19 Aug, 2012
  • Request id: None
  • Purchased: 1 time(s)
  • Average Rating: (95) A+
Request Description

 

Montana Minerals sold coal to Beta Electric, receiving a 6-month, noninterest-bearing note for $200,000. The implied discount rate on the note is 8% per annum. Montana uses a periodic inventory system.

Required:
(1) Prepare the journal entry to record the sale. (2) Compute the effective rate of interest.

 

Solution Description

 

Montana Minerals sold coal to Beta Electric, receiving a 6-month, noninterest-bearing note for $200,000. The imp