Entries for discounting notes payable

Ramsey Company issues an $800,000, 45-day note to Buckner Company for merchandise inventory. Buckner discounts the note at 7%.

a. Journalize Ramsey’s entries to record:

1. the issuance of the note.

2. the payment of the note at maturity.

b. Journalize Buckner’s entries to record:

1. the receipt of the note.

2. the receipt of the payment of the note at maturity.