USA Journal Entries for T-Note Discount and T-Note Redeemed Early

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Hello,

What is the journal entry to record the discount on a T-Note? It was purchased in February with a maturity date of September. Is the entry a debit to T-Note and credit to Interest? Is it correct to use straight line amortization? For example, if the discount was $500, each of the 7 months I would record $71.43.

This same T-note was redeemed early. It was redeemed in Aug. What is the journal entry to record a T-Note that was redeemed early?

Lets assume this T-Note was purchased in Feb for $9,500 with a face value of $10,000 and redeemed in Aug for $9,900. Are the following entries correct?

Purchase T-Note
Debit T-Note $9,500
Credit Cash $9,500

Amortization each month for 6 months

Debit T-Note $71.43
Credit Interest $71.43

In Aug, prior to redeeming, the T-Note would have a book balance of $9,928.58

Redeem T-Note

Debit Cash $9,900
Debit Realized Loss $28.58
Credit T-Note $9,928.58

Interest was earned in Jun, which is a debit to cash and credit to interest, right?

Thank you!!
 

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