FACTS:

At the beginning of2022 (January 1, 2022), LENDER Company made a loan to BORROWER Company and LENDER received in exchange from BORROWER a 3-year, $200,000 note (receivable) with a stated rate of interest of 5%. The market rate of interest for a note receivable with similar risk is currently 7%.

REQUIRED: ROUND ALL COMPUTATIONS TO THE NEAREST DOLLAR! IF you have a $1.00 rounding difference at the end---don't worry!

I. Compute the PRESEN T VALUE (PV) ofLENDER Company's note receivable as ofthe beginning (1-1) of2022. Follow the examples in your workbook (pages 104-106). Show your calculations. You can do this part with a calculator or use EXCEL to do it for you.

2. Prepare a complete 3-year Note Receivable Discount Amortization Schedule for LENDER Company using the effective interest method. When preparing this schedule use CELL FORMULAS and CELL REFEREN CES. Do N OT perform any calculations that you enter into the cells directly. Let the spreadsheet software use your cell formulas to calculate the values needed. It will help to set up an input section on the spreadsheet with your PV number and the appropriate interest rates.

Print out your completed amortization schedule AND also print out the cell formulas and cell references that you developed.

4. Prepare ALL of the required journal entries for the LENDER Company for the year 2022 only! There should be one entry at January 1, 2022 and one entry at December 31, 2022. lbis is the first year only. Please use cell references to get the dollar amounts for the entries from your amortization schedult . Do not j ust enter the dollar amounts in the cells.

5. Print out both the journal entries AND the cell references that you used.

6. Using cell references/formulas to get the proper numbers, show the NR section ofthe BS for LENDER Company ONLY. Show the DATE OF ISSUE (1-1-2022) AND the END of2022 (12-31-2022). Please use good form for the Balance Sheet presentation.

7. Print out both the Balance Sheet presentation AND the cell references/formulas that you

used.