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Q4: 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.

3. Prepare a table showing appropriate journal and adjusting entries by the end of each years.
4. Why the treatment of long term notes receivable is different as compare to short term note receivable?