Schedule of Amortization of Discount/Premium on a Note Receivable

1. Obtain a $1 bill and type the serial number into the top cell of your EXCEL spreadsheet. Do not use the same $1 bill as another ACCT313 student. This is to ensure that every student has a unique problem.

2. Assume the last 5 digits of the serial number on the $1 bill represents the face value of a Note Receivable. Assume the stated rate is the first digit of the serial number and that the effective rate (market rate) is the 2^nd digit of the serial number. Alternatively, if you would like to work an example of a premium amortization, choose an effective rate that is lower than the stated rate.

3. Calculate the Present Value of the note based on the face values and interest rates determined in step #2, assuming that the note has a 3-year term with interest paid annually on December 31, and that the loan is collateralized by accounts receivable. Record the initial journal entry for the Note Receivable assuming an issue date of January 1.

4. Prepare a schedule of amortization of the discount/premium on the Note Receivable using EXCEL, incorporating appropriate formulas in the various spreadsheet cells.

5. Record all journal entries from issuance of the note through repayment of the note at the end of the 3-year term.

Upload your EXCEL schedule and journal entries to Canvas. Please do not email anything

1. Obtain a $1 bill and type the serial number into the top cell of your EXCEL spreadsheet. Do not use the same $1 bill as another ACCT313 student. This is to ensure that every student has a unique problem. 2. Assume the last 5 digits of the serial number on the $1 bill represents the face value of a Note Receivable. Assume the stated rate is the first digit of the serial number and that the effective rate (market rate) is the 2nd digit of the serial number. Alternatively, If you would like to work an example of a premium amortization, choose an effective rate that is lower than the stated rate. 3. Calculate the Present Value of the note based on the face values and interest rates determined in step #2, assuming that the note has a 3-year term with interest paid annually on December 31, and that the loan is collateralized by accounts receivable. Record the initial Journal entry for the Note Receivable assuming an issue date of January 1. Prepare a schedule of amortization of the discount/premium on the Note Receivable using EXCEL, incorporating appropriate formulas in the various spreadsheet cells. Record all Journal entries from Issuance of the note through repayment of the note at the end of the 3-year term. 5. Submission: Upload your EXCEL schedule and journal entries to Canvas. Please do not email anything. 1. Obtain a $1 bill and type the serial number into the top cell of your EXCEL spreadsheet. Do not use the same $1 bill as another ACCT313 student. This is to ensure that every student has a unique problem. 2. Assume the last 5 digits of the serial number on the $1 bill represents the face value of a Note Receivable. Assume the stated rate is the first digit of the serial number and that the effective rate (market rate) is the 2nd digit of the serial number. Alternatively, If you would like to work an example of a premium amortization, choose an effective rate that is lower than the stated rate. 3. Calculate the Present Value of the note based on the face values and interest rates determined in step #2, assuming that the note has a 3-year term with interest paid annually on December 31, and that the loan is collateralized by accounts receivable. Record the initial Journal entry for the Note Receivable assuming an issue date of January 1. Prepare a schedule of amortization of the discount/premium on the Note Receivable using EXCEL, incorporating appropriate formulas in the various spreadsheet cells. Record all Journal entries from Issuance of the note through repayment of the note at the end of the 3-year term. 5. Submission: Upload your EXCEL schedule and journal entries to Canvas. Please do not email anything