On January 1, 2020, Monty Company issued a $1,071,450, 5-year, zero-interest-bearing note to Flounder Bank. The note was issued to yield 8% annual interest. Unfortunately, during 2021 Monty fell into financial trouble due to increased competition. After reviewing all available evidence on December 31, 2021, Flounder Bank decided that the loan was impaired. Monty will probably pay back only $714,300 of the principal at maturity.

(a)

Partially correct answer iconYour answer is partially correct.

Prepare journal entries for both Monty Company and Flounder Bank to record the issuance of the note on January 1, 2020. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 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.)

No.	Account Titles and Explanation	Debit	Credit
	Monty Company (Debtor):
1.
	Flounder Bank (Creditor):
2.