Make the entry to record the partial refunding. Assume Demich Co. makes reversing entries when appropriate.  (2) Prepare the adjusting entry at December 31, assuming straight-line amortization of the discount.

Make the entry to record the partial refunding. Assume Demich Co. makes reversing entries when appropriate. (2) Prepare the adjusting entry at December 31, assuming straight-line amortization of the discount.

1. On August 31, Demich Co. partially refunded $180,000 of its outstanding 10% note payable made one year ago to Best Fededral 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 discounted at 9% by the bank.

Instructions

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

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


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