On January 1, 2015, Financial Services made a loan to Southwest Consulting. In exchange, Financial Services received a $145,000, 4-year note, bearing interest at 9% payable annually on December 31. The market rate of interest is 5%. Financial Services has a December 31 year-end while Southwest Consulting's year-end is September 30. Please make sure your final answer(s) are accurate to the nearest whole number. a) Calculate the present value of the note.

Present value = $

b) Calculate the amount of discount or premium on the note.

Discount/Premium = $

c) Complete the following schedule of note amortization.

Discount/Carrying CashInterestPremiumAmountDateReceivedIncomeAmortizedof NoteJanuary 1, 2015 December 31, 2015 December 31, 2016 December 31, 2017 December 31, 2018 December 31, 2018 final payment --

d) Record the journal entries for Financial Services on January 1, 2015 and December 31, 2015. Enter an appropriate description when entering the transactions in the journal. Dates must be entered in the format dd/mmm (ie. January 15 would be 15/Jan).

General JournalPage G5DateAccount/ExplanationPRDebitCredit

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