In: Accounting
Below market interest note
On January 1, Investor purchased a 9 year, $400,000; 4% note from Borrower. The yield
(market interest rate) at the time of issuance was 9%, compounded annually.
For Investor:
2. Record the journal entry necessary on December 31.
(Assuming no additional entries were made since January 1)
3.Record the journal necessary on the following January 1.
For Borrower:
4. Record the journal necessary on January 1.
5. Record the journal necessary on December 31.
6. Record the journal necessary on the following January 1.