10. b

On January 1, 2025, Sage Hill Company loans $202,008 to Oriole Corporation in exchange for a $240,000 zero-interest-bearing note payable in 2 years. The market rate of interest for a transaction of this nature for Oriole is 9%. The present value of 1,2 years out at 9% is 0.8417. Sage Hill Company has a calendar year-end and it uses the effective-interest method. (a) Prepare journal entries on 1/1/25 to recognize the loan for Sage Hill Company. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List debit entry before credit entry.) Date Account Titles and Explanation Debit Credit 1/1/25 eTextbook and Media List of Accounts Attempts: 1 of 15 used (b) Prepare the journal entry to recognize interest on 12/31/25 for Sage Hill Company. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List debit entry before credit entry. Round answers to 0 decimal places, e.g. 5,275.)