On January 2, SHB Company receives a 3-year, $10,000, noninterest bearing note, the present value of which is $7,722. The rate implicit on this transaction is 9%. You are completing SHB's note receivable account.

To prepare each required journal entry:

Enter the corresponding debit or credit amount in the associated column.

Round all amounts to the nearest whole number.

Not all rows in the table might be needed to complete each journal entry.

If no journal entry is needed, check the “No entry required” box at the top of the table as your response.

1. Prepare the entry to record the acquisition of the note.

No Entry Required

Account Name	Debit	Credit
Notes receivable
Discount on notes receivable
Cash

2. Prepare the adjusting entry necessary to record interest revenue at the end of the first year.

No Entry Required

Account Name	Debit	Credit
Discount on notes receivable
Interest revenue

3. Prepare the adjusting entry necessary to record interest revenue at the end of the second year.

No Entry Required

Account Name	Debit	Credit
Discount on notes receivable
Interest revenue

Answer rating: 100% (QA)

1 Acquisition of the Note When SHB Company receives the noninterest bearing note it needs to record the transaction at its present value The present v... View the full answer