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On December 31, 2017, Pronghorn Company borrowed $73,641 from Paris Bank, signing a 5-year, $118,600 zero-interest-bearing note. The note was issued to yield 10% interest.
On December 31, 2017, Pronghorn Company borrowed $73,641 from Paris Bank, signing a 5-year, $118,600 zero-interest-bearing note. The note was issued to yield 10% interest. Unfortunately, during 2019, Pronghorn began to experience financial difficulty. As a result, at December 31, 2019, Paris Bank determined that it was probable that it would receive back only $88,950 at maturity. The market rate of interest on loans of this nature is now 11%. (a) [ ] Your answer is correct. Prepare the entry to record the issuance of the loan by Paris Bank on December 31, 2017. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to O decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31, 2017 Notes Receivable 118600 Discount on Notes Receivable 44959 Cash 73641
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