Gong Corporation issued a $600,000, 3-year, non-interest-bearing note payable to Billings Corp. for April 30, Year 5 to purchase equipment. Gong Corporation would normally pay interest at 7%, they have a December 31 year end, and they will repay the note with three equal yearly payments. Gong Corporation follows IFRS.

Required

Provide the journal entries for Gong Corporation, the debtor. Remember to use a Word table and correct journal entry format for all your journal entries. Round journal entry amounts to the nearest dollar. Round interest to the nearest full month. This question is easier to do if you make an amortization table in Excel. You do not need to provide an amortization table.

Complete the following journal entries with the details provided above.

Record the note

December 31, Year 5 interest accrual

April 30, Year 6 payment

December 31, Year 6 interest accrual

April 30, Year 7 payment