Question: On December 3 1 , 2 0 2 5 , Iva Majoli Company borrowed $ 6 3 2 2 1 from Paris Bank, signing a

On December 31,2025, Iva Majoli Company borrowed $63221 from Paris Bank, signing a 5-year, $100,000 zero-interest-bearing note. The note was issued to yield 10% interest. Unfortunately, during 2027, Majoli began to experience financial difficulty. As a result, at December 31,2027, Paris Bank determined that it was probable that it would receive back only $67200 at maturity. The market rate of interest on loans of this nature is now 11%.

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