Amortization of a Note Receivable Issued at a Discount (Intermediate Financial Accounting #17)

Using the present value of the $100,000 face value note we'll work out an amortization schedule and report the journal entries to recognize the note, report interest and amortize the discount along with derecognizing the note.
NOTE THAT AT THE END I SAID THE CASH INTEREST PAYMENT IS AN ADJUSTMENT. IT IS NOT AN ADJUSTMENT, BUT A JOURNAL ENTRY. Normally in a real life situation the interest is accrued by December 31st (end of year) and paid in cash at a later date. In the example I made the cash was paid on December 31st (not super realistic) which is a journal entry since adjusting entries DO NOT INVOLVE CASH! Sorry for the confusion.
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[@ryanalexander2855]

Cumulative final next week. Your helping me remember so much ! Thank You!!!!

[@IT-wm6hm]

Brilliant work!!

[@Shellschocked]

Thank you very much, very clear.

[@sumnerrogers5091]

For the Journal entry to recognize accepting the note aren't you forgetting the discount? Shouldnt it be: N/R 100,000 Discount 18,492 Cash 81,508 The not is being issued at 100,00. So why are you recording it at the CV?

[@NCXerxes]

You should add an annotation on the video then, because the way @Sumner Rogers explains it is how Wiley teaches it, which holds about 80% of the market share for Intermediate Accounting Textbooks in the US...

[@pinkee12491]

That makes alot of sense thanks! This really shows that there are more than one way to do a journal entry. But Like NC Xerxes says, it's a pretty good idea to leave an annotation stating the way Sumner Roger's journalized it. That way of teaching is pretty much in all US accounting textbooks!

[@ThePandazoii]

Thank you so muchhh >

[@Daniel.Hernandex]

nice video! i really love thus stuff

[@binitabasnet9401]

Very nice

[@swaggyg6017]

Hey can you please tell me WHY were doing this? I know we have a set amount of interest payments we get, and can you also explain what is "market rate" and why the difference makes us do this table? thanks so much. -Ryerson Student

[@swaggyg6017]

hey yeah some profs did last year, btw I have another question, say its a semi annual interest payments, the bond is for 5 years, and youre trying to discount using PV tables, do you have to look at the rate, and 5 YEARs or 10 YEARRS? since its semi annual payments, thanks so much!

[@loik345]

I Love U.