Skysong Corporation issued a 5year 73000 zerointerestbearing

Skysong Corporation issued a 5-year, $73,000, zero-interest-bearing note to Brown Company on January 1, 2017, and received cash of $41,422. The implicit interest rate is 12%.

Prepare Skysong’s journal entries for (a) the January 1 issuance and (b) the December 31 recognition of interest. (Round answers to 0 decimal places, e.g. 38,548. If no entry is required, select \"No Entry\" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

No.

Date

Account Titles and Explanation

Debit

Credit

January 1, 2017

December 31, 2017

No.	Date	Account Titles and Explanation	Debit	Credit
(a)	January 1, 2017	$\"\"$	$\"\"$	$\"\"$
		$\"\"$	$\"\"$	$\"\"$
		$\"\"$	$\"\"$	$\"\"$
(b)	December 31, 2017	$\"\"$	$\"\"$	$\"\"$
		$\"\"$	$\"\"$	$\"\"$

Journal entry :

No	Date	account titles and explanation	debit	credit
(a)	January 1,2017	Cash	41422
		Discount on notes payable	31578
		Notes payable		73000
		(To record note issue)

(b)	December 31,2017	Interest expense (41422*12%)	4971
		Discount on notes payable		4971
		(To recognition of interest)

Skysong Corporation issued a 5-year, $73,000, zero-interest-bearing note to Brown Company on January 1, 2017, and received cash of $41,422. The implicit interes

Skysong Corporation issued a 5year 73000 zerointerestbearing

Solution

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