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QUESTION
Inferring an effective interest rate from the financial statements (LO 2, 3) The following information was extracted from the financial records of...
Inferring an effective interest rate from the financial statements
(LO 2, 3)
The following information was extracted from the financial records of Leong Cosmetics:
20192018Balance SheetNotes payable$200,000$200,000Less: Discount on notes payable 12,000 14,400Income StatementInterest expense$ 16,400$ 16,200
- What is the effective interest rate on the notes payable?
- Prepare the journal entry to record interest expense during 2019.
