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Bencorp Issues a $90,000, 6-Month, Noninterest-Bearing Note That the Bank

Question 7

Essay

Bencorp issues a $90,000, 6-month, noninterest-bearing note that the bank discounted at a 10% discount rate.
Required:
1. Prepare the appropriate journal entry to record the issuance of the note.
2. Determine the effective interest rate.

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