Federal Bank of America has loaned $9,000 to Southgate Animal Hospital, using a 90-day non-interest-bearing note. The bank discounted the note at 8%. The debit to Discount on Notes Payable in the general journal will be in the amount of

Answer: $180

Explanation:

From the question, Federal Bank of America has loaned $9,000 to Southgate Animal Hospital, using a 90-day non-interest-bearing note. The bank discounted the note at 8%.

Therefore, the debit to Discount on Notes Payable in the general journal will be:

= $9,000 * 8% * 90/360

= $9,000 * 8/100 * 1/4

= $9,000 * 0.08 * 0.25

= $180

The correct answer is $180

It should be noted that we used 360 days for a year.