Question

P&G Co. made a loan and received in exchange a 3-year, $50,000 note bearing interest 6 percent. The market rate of interest for a note of similar risk is 7 percent. How does P&G record the receipt of the note? Do calculations for discount amortizations if applicable along with early journal entries the company had to pass.

Requirement

1. At which value P&G Co. accountant will record the account receivable in the balance sheet?

2. Is the accountant of P&G Co. will prepare discount amortization table? If yes, then prepare discount amortization table for coming ten years.