On November 1, 2010, Edwin, Inc., borrowed cash and signed a $60,000, one year note payable.
Required:
1. Compute the following items assuming
(i) an interest bearing note at 12%,
(ii) a non interest bearing note discounted at 12%:
a. Cash received
b. Effective interest rate
c. Interest expense for 2010
2. Prepare the journal entries for Edwin, Inc., under each case for 2010 and 2011.