On September 30, 2017, David's Co

question 1

Essay

On September 30, 2017, David's Co.'s treasurer signed a note promising to pay $260,000 on December 31, 2017. Proceeds of the note were $250,900.(a.) Calculate the discount rate used by the lender.(b.) Calculate the effective interest rate on the loan.(c.) Write the journal entry to show the effect of recording interest expense for the month of October. (Round to the nearest whole dollar)

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Definitions:

Gross Profit

A company's revenue minus its cost of goods sold, reflecting the initial profit figure before deducting operating expenses, interest, and taxes.

Non-controlling Interest

A share in a subsidiary company not owned by the parent company, indicating the portion of equity interest that is not directly controlled by the parent company.

Marketable Securities

Financial instruments that can be quickly converted into cash at a market price, such as stocks, bonds, or Treasury bills.

Comprehensive Income

Encompasses all changes in equity during a period, except those resulting from investments by owners and distributions to owners.