Question

On january 1, ajax corp accepted a one-year note for $50,000 at 5% from one of its customers. when the note matured on december 31, the customer was unable to pay, and the company recorded the dishonor. the amount of the debit in the dishonor entry would be:

Answer 1

The debit would be 5% of the $50,000 = 0.05x$50,000= $2500 which would have to be entered in the dishonor debit to show how much was still owed by the person who promised to pay the 1 year note to the Ajax Corp.