1. On January 1 2010, J Company lends M Company $20,000 with payment due in 5 years. J Company calculates that present value of the $20,000 is $13,612.

Required:

a) Prepare the journal entry for J Company on January 1, 2010.

b) Prepare an effective interest amortization table with 4 columns for J Company.

c) Prepare the journal entries for J Company on 31 December 2010, 2011, 2012, 2013, 2014 and 2015. Assume that M Companies repays J Company promptly. 2. Repeat all the requirements in question 1 above if the note has a stated rate of 6% per annum. 3. Repeat all the requirements in question 1 above if the note has a stated rate of 10% per annum.