On January $1,2023,$ Sunland Limited issued a $$1,368,000,$ five$-$year, zero$-$interest$-$bearing note to Northern Savings Bank. The note

was issued to yield $8\%$ annual interest. Unfortunately, during $2023$ Sunland fell into financial trouble due to increased competition.

After reviewing all available evidence on December $31,2023,$ Northern Savings Bank decided that the loan was impaired and that

there was a significant change in credit risk. Sunland will probably pay back only $$912,000$ of the principal at maturity. For simplicity,

assume that this reflects the probability$-$weighted amount. Both Sunland and Northern Savings Bank prepare financial statements in

accordance with IFRS $9.$

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

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

$($a$)$

Your answer is partially correct.

Using $(1)$ factor tables, $(2)$ a financial calculator, or $(3)$ Excel function PV$,$ prepare journal entries for both Sunland and Northern

Savings Bank to record the issuance of the note on January $1,2023.$ Use the result from the financial calculator or Excel function

PV$.($Round factor values to $5$ decimal places, e$.$g$.1\mathrm{.}25124$ and final answers to $0$ decimal places, e$.$g$.5,275.$ 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 $0$ for the amounts. List all debit entries before credit

entries.$)$

Date Account Titles and Explanation

Sunland Limited:

January $1,$

$2023$

Notes Payable

Northern Savings Bank: