Prepare a computation of the carrying value of the patent at December 31 , 2015 .
5 ) On August 31 , Latty Co . partially refunded $ 401,000 of its outstanding 10 % note payable made one year ago to Dugan State Bank by paying $ 401,000 plus $ 40,100 interest , having obtained the $ 441,100 by using $ 126,240 cash and signing a new one-year $ 346,000 note discounted at 9 % by the bank .
6 ) Make the entry to record the partial refunding . Assume Latty Co . makes reversing entries when appropriate . ( Credit account titles are automatically indented when the amount is entered . Do not indent manually .)
6 )
7 ) Prepare the adjusting entry at December 31 , assuming straight-line amortization of the discount . ( Credit account titles are automatically indented when the amount is entered . Do not indent manually .)