Problems 8-8 Imputing interest on a nominal interest-bearing note and fair value option (LO 8-4, LO 8-5) On January 2, 2017, Criswell Acres purchased from Mifflinburg Farm Supply a new tractor that had a cash selling price of $109,837. As payment, Criswell gave Mifflinburg Farm Supply $25,000 in cash and a $100,000, five-year note that provided for annual interest payments at 6%. At the time of the sale, the interest rate normally charged to farms with Criswell's credit rating is 10%. Use the following links to the present value tables to calculate answers. (PV of 1, PVAD of 1, and PVOA of 1) (Use the appropriate factor(s) from the tables provided.) Required: 1. Prepare Mifflinburg Farm Supply's journal entry to record the sale. 2. Prepare the journal entry to record the first interest payment Mifflinburg Farm Supply received on December 31, 2017. 3. Determine the note receivable balance that Mifflinburg Farm Supply will report on December 31, 2018. 4. Determine Mifflinburg Farm Supply's note receivable balance on December 31, 2018, assuming that the company reports notes receivable at fair value and the relevant rate of interest at that time has fallen to 8%. Assume that the December 31, 2018, interest payment has been made. Complete this question by entering your answers in the tabs below. Req 1 and 2 Reg 3 and 4 1. Prepare Mifflinburg Farm Supply's journal entry to record the sale. 2. Prepare the journal entry to record the first interest payment Mifflinburg Farm Supply received on December 31, 2017. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field. Round your final answers to the nearest whole dollar.) Show less View transaction list View journal entry worksheet Credit No 1 Date General Journal 01/02/2017 Cash Notes receivable Sales revenue Debit 25,000 84,837 109,837 2 12/31/2017 Cash Notes receivable 25,000 84,837 Req 1 and 2 Req 3 and 4 > Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 and 4 3. Determine the note receivable balance that Mifflinburg Farm Supply will report on December 31, 2018. 4. Determine Mifflinburg Farm Supply's note receivable balance on December 31, 2018, assuming that the company reports notes receivable at fair value and the relevant rate of interest at that time has fallen to 8%. Assume that the December 31, 2018, interest payment has been made. (Round your final answers to the nearest whole dollar.) Show less 3. Notes receivable balance 4. Total fair value Problems 8-8 Imputing interest on a nominal interest-bearing note and fair value option (LO 8-4, LO 8-5) On January 2, 2017, Criswell Acres purchased from Mifflinburg Farm Supply a new tractor that had a cash selling price of $109,837. As payment, Criswell gave Mifflinburg Farm Supply $25,000 in cash and a $100,000, five-year note that provided for annual interest payments at 6%. At the time of the sale, the interest rate normally charged to farms with Criswell's credit rating is 10%. Use the following links to the present value tables to calculate answers. (PV of 1, PVAD of 1, and PVOA of 1) (Use the appropriate factor(s) from the tables provided.) Required: 1. Prepare Mifflinburg Farm Supply's journal entry to record the sale. 2. Prepare the journal entry to record the first interest payment Mifflinburg Farm Supply received on December 31, 2017. 3. Determine the note receivable balance that Mifflinburg Farm Supply will report on December 31, 2018. 4. Determine Mifflinburg Farm Supply's note receivable balance on December 31, 2018, assuming that the company reports notes receivable at fair value and the relevant rate of interest at that time has fallen to 8%. Assume that the December 31, 2018, interest payment has been made. Complete this question by entering your answers in the tabs below. Req 1 and 2 Reg 3 and 4 1. Prepare Mifflinburg Farm Supply's journal entry to record the sale. 2. Prepare the journal entry to record the first interest payment Mifflinburg Farm Supply received on December 31, 2017. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field. Round your final answers to the nearest whole dollar.) Show less View transaction list View journal entry worksheet Credit No 1 Date General Journal 01/02/2017 Cash Notes receivable Sales revenue Debit 25,000 84,837 109,837 2 12/31/2017 Cash Notes receivable 25,000 84,837 Req 1 and 2 Req 3 and 4 > Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 and 4 3. Determine the note receivable balance that Mifflinburg Farm Supply will report on December 31, 2018. 4. Determine Mifflinburg Farm Supply's note receivable balance on December 31, 2018, assuming that the company reports notes receivable at fair value and the relevant rate of interest at that time has fallen to 8%. Assume that the December 31, 2018, interest payment has been made. (Round your final answers to the nearest whole dollar.) Show less 3. Notes receivable balance 4. Total fair value