On January 1, 2022, Slack Company finished legal services and accepted in exchange a 5% $400,000 promissory note with a due date of December 31, 2024. Interest is receivable on January 1 of each year. Notes with similar risk have a market rate of interest of 10%. Given N=2, I/Y=10%, PMT=0 and FV=400,000.

(c) Prepare a Schedule of Note Discount/Premium Amortization for Slack Company under the effective interest method.

Slack Company
Schedule of Note Discount/Premium Amortization
Effective Interest Method
Date	Cash	Interest	Amortized Amount	Carrying Value of Note
Jan 1, 2022				$Answer 6 Question 2
Dec 31, 2022		$Answer 8 Question 2	$Answer 9 Question 2	Answer 10 Question 2
Dec 31, 2023		Answer 12 Question 2	Answer 13 Question 2	Answer 14 Question 2
Dec 31, 2024	Answer 15 Question 2	Answer 16 Question 2	Answer 17 Question 2	Answer 18 Question 2

(d) Prepare the journal entries on the following dates:

Jan 1, 2022

Dr. Answer 19 Question 2 CashNotes ReceivableInterest RevenueLegal Services	$Answer 20 Question 2
Cr. Answer 21 Question 2 CashLegal ServicesNotes ReceivableInterest Revenue		$Answer 22 Question 2

Dec 31, 2022

Dr. Answer 23 Question 2 Interest ReceivableCash	$Answer 24 Question 2
Dr. Answer 25 Question 2 Interest RevenueLegal ServicesNotes Receivable	$Answer 26 Question 2
Cr. Answer 27 Question 2 Interest RevenueCashLegal ServicesNotes Receivable		$Answer 28 Question 2