Prepare journal entries on 1/1/25 to recognize the loan for Sage Hill Company. On January 1, 2025,

Prepare journal entries on 1/1/25 to recognize the loan for Sage Hill Company.  

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On January 1, 2025, Sage Hill Company loans $202,008 to Oriole Corporation in exchange for a $240,000 zero-interest-bearing note payable in 2 years. The market rate of interest for a transaction of this nature for Oriole is 9%. The present value of 1, 2 years out at 9% is 0.8417. Sage Hill Company has a calendar year-end and it uses the effective-interest method. On January 1, 2025, Sage Hill Company loans $202,008 to Oriole Corporation in exchange for a $240,000 zero-interest-bearing note payable in 2 years. The market rate of interest for a transaction of this nature for Oriole is 9%. The present value of 1, 2 years out at 9% is 0.8417. Sage Hill Company has a calendar year-end and it uses the effective-interest method.

Answer rating: 100% (QA)

To recognize the loan transaction between Sage Hill Company and Oriole Corporation on January 1 2025 we need to calculate the present value of the not... View the full answer