Answer:
The journal entry for Rasheed company on April 1,2020 will be:
Account title Dr Cr
Cash 192,000
Finance charge 8,000
Notes payable 200,000
Finance charge = $400,000 x 2% = 8,000
Notes Payable = 200,000
Cash = 200,000 - 8,000 = 192,000
Answer:
Debit: Cash with $192,000
Debit: Finance charge with $8,000
Credit: Notes payable with $200,000
Explanation:
Step 1: Calculation of finance charge and cash received
Finance charge = $400,000 × 2% = $8,000
Cash received = $200,000 - $8,000 = $192,000
Step 2: Calculation preparation of journal entry
The journal entries appear as follows:
DR ($) CR ($)
Cash 192,000
Finance charge 8,000
Notes payable 200,000
Being the cash received and finance charge on note payable.
