On January 1, 2020, Happy Inc. sold a hot tub to Monica, receiving a two-year, noninterest-bearing note of $9,680 in exchange for a hot tub that normally sells for $8,000. The note is for an amount that achieves an effective interest rate of 10% per year.

Required:

1.Prepare the journal entry to record the sale.

2.Prepare any adjusting entry necessary on December 31, 2020.

3.Prepare any adjusting entry necessary on December 31, 2021 (maturity).

II. (1) On October 1, 20x1, Metro Bank loaned $8,000,000 and received a 5-month promissory note with 10% interest payable at maturity. Metro's fiscal year ends on December 31. (2) Metro recorded accrued interest on December 31, 20x1. (3) Metro received the promissory note on the March 1, 20x2 due date. Required: prepare the appropriate journal entries.

III. On April 7, 2020, Wilhelm, Inc. sold goods for $50,000 and accepted a 10%, 60-day note. On April 22, 2020, the company sold the note to a bank at a 13% discount rate.

Required:

Compute the amount of cash received from the sale (discounting).