On January 1, 2022, Balance Bar Co. lends Bio Foods $100,000 in exchange for a $100,000, 5-year note bearing interest at 8 percent annually. The market rate of interest for a note of similar risk is also 8 percent. a. How does Balance Bar record the receipt of the note? b. And how does Balance Bar record the receipt of interest at the end of the first year? c. At the end of the second year?

On January 1, 2022, Balance Bar Co. lends Bio Foods $100,000 in exchange for a $100,000, 5-year note bearing interest at 8 percent annually. The market rate of interest for a note of similar risk is also 8 percent. a. How does Balance Bar record the receipt of the note? b. And how does Balance Bar record the receipt of interest at the end of the first year? c. At the end of the second year?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 24Q: Chemical Enterprises issues a note in the amount of $156,000 to a customer on January 1, 2018. Terms...

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Chemical Enterprises issues a note in the amount of $156,000 to a customer on January 1, 2018. Terms of the note show a maturity date of 36 months, and an annual interest rate of 8%. What is the accumulated interest entry if 9 months have passed since note establishment?
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