On January 1, 2020, Lender Corp. lent $1,000 to its Chief Executive Officer, interest-free (no interest charge). However, the loan is repayable in four instalments, each December 31, until paid. The market rate for similar loans (with similar credit risk) is 6%.

On January 1, 2020, Lender Corp. lent $1,000 to its Chief Executive Officer, interest-free (no interest charge). However, the loan is repayable in four instalments, each December 31, until paid. The market rate for similar loans (with similar credit risk) is 6%. + Required: (Amounts are low for exam purposes.) . a) Prepare the journal entry to record the loan on January 1. (Be sure to 'think your way' through this problem.) . b) Record any other journal entry related to the loan for 2020. ~ Present Value of $ 1- Period 6%% 7%% 8% 9%% 0.9434 2 0.9346- 0.9259 0.9174- 0.89. 0.8734 0.8573- 0.8417 + 0.8396- 0.8163. 0.7938 0.7722+ 0.7921 0.7629 0.735 0.7084 52 0.7473 0.713 0.6806 0.6499 Present Value of an Ordinary Annuity of $ 1 Period 6% 7%% 8% 9% 2 1 . 0.9434 . 0.9346 0.9259 0.9174. 1.8334 . 1.808 1.7832 1.7591 2.673- 2.6243. 2.577. 2.5313. 3.4651 + 3.3872 2 3.312 3.2397 . 4.2124 4.1002 3.9926 3.8896