Question: On December 3 1 , 2 0 2 5 , Windsor Company borrowed $ 5 8 , 8 1 0 from Sheridan Bank, signing a

On December 31,2025, Windsor Company borrowed $58,810 from Sheridan Bank, signing a 6-year, $110,000 zero-interest-bearing note. The note was issued to yield 11% interest. Unfortunately, during 2027, Windsor began to experience financial difficulty. As a result, at December 31,2027, Sheridan Bank determined that it was probable that it would receive back only $66,000 at maturity. The market rate of interest on loans of this nature is now 15%.

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