Recording and Reporting Transactions with Short$-$ Term, Non$-$Interest$-$Bearing Note Receivable

On May $1,$ Swimm Company sold merchandise to Lochte and received a $$76,560($face amount$),$ one$-$year, non$-$interest$-$

bearing note. The market rate is $10\%.$ Lochte paid the note in full on its maturity date.

Note: Round answers to the following questions to the nearest whole dollar.

a$.$ Prepare entries for Swimm Company on May $1$ and December $31($year$-$end adjustment$).$ Amortize the discount on the

note receivable using the straight$-$line method.

b$.$ Identify which accounts and amounts should be presented on the annual income statement and year$-$end balance sheet

$($ignoring cash$).$

c$.$ Record the entry on April $30$ of the following year to $(1)$ amortize the discount on the note and $(2)$ to record the receipt of

payment on the note.