Current Attempt in Progress

Flounder Corporation is in the business of selling cattle. Due to recent diseases plaguing cattle, Flounder is experiencing a cash

shortage. Flounder issued a $$302,400,6-$year, zero$-$interest$-$bearing note to Little Town Corp. on January $1,2023,$ and received

$$216,000$ cash. In addition, to conserve cash, Flounder agreed to sell cattle to Little Town for an amount less than the regular selling

price over the $6-$year period. The market interest rate for similar notes is $8\%.$ Flounder uses the effective interest method.

$($a$)$ Calculate the present value of the note on January $1$ using $(1)$ a financial calculator or $(2)$ Excel function PV$.($Hint: Refer to Chapter

$3$ for tips on calculating.$)($Round answer to $0$ decimal places e$.$g$.58,971.)$

Present value of the note $

$($b$)$ Prepare Flounder's January $1$ journal entry. $($Credit account titles are automatically indented when the amount is entered. Do not indent

manually. If no entry is required, select $"$No Entry" for the account titles and enter O for the amounts. Round answer to $0$ decimal places e$.$g$.$

$58,971.)$

Click here to view the factor table PRESENT VALUE OF $1.$

Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF $1.$

Account Titles and Explanation

Debit

Credit