Question

On December 31, 2020, Monty Inc. rendered services to Beghun Corporation at an agreed price of $125,934, accepting $50,000 down and agreeing to accept the balance in four equal installments of $25,000 receivable each December 31. An assumed interest rate of 12% is imputed.

Prepare an amortization schedule. Assume that the effective-interest method is used for amortization purposes. (Round answers to 0 decimal places, e.g. 5,275.)

December 31, 2020 Schedule of Note Discount Amortization
Date		Cash Received		Interest Revenue		Discount Amortized		Carrying Amount of Note
12/31/20		$		$		$		$
12/31/21
12/31/22
12/31/23
12/31/24

Prepare the entries that would be recorded by Monty Inc. for the sale on December 31, 2020. (Round answers to 0 decimal places, e.g. 5,275. 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 the amount is entered. Do not indent manually.)

Prepare the entries that would be recorded by Monty Inc. for the (a) receipts and (b) interest on December 31, 2021. (Round answers to 0 decimal places, e.g. 5,275. 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 the amount is entered. Do not indent manually.)

No.	Account Titles and Explanation	Debit	Credit
(a)
(b)

Prepare the entries that would be recorded by Monty Inc. for the (a) receipts and (b) interest on December 31, 2022. (Round answers to 0 decimal places, e.g. 5,275. 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 the amount is entered. Do not indent manually.)

No.	Account Titles and Explanation	Debit	Credit
(a)
(b)

Answer 1

monty Inc

December 31,2020

Schedule of Note Discount Amortization

Date	Cash received	Interest revenue/Discount amortized	Decrease in carrying value	Carrying amount of Note
31-Dec-20				$ 75,934
31-Dec-21	$ 25,000	$ 9,112	$ 15,888	$ 60,046
31-Dec-22	$ 25,000	$ 7,205	$17,795	$42,251
31-Dec-23	$ 25,000	$5,070	$ 19,930	$ 22,321
31-Dec-24	$ 25,000	$ 2,578	$ 22,321	$ 0

solution 2:

Date	Accounts title and Explanation	Debit($)	Credit($)
31-Dec-20	cash	50,000
	note receivable	100,000
	service revenue		125,934
	discount on note recievables		24,066
	( to record service revenue)

Date	Accounts title and explanation	Debit ($)	credit($)
31-Dec-21	Cash	$ 25,000
	notes receivables		$ 25,000
	(to record instalment received)
31-dec-21	discount on note receivable	$ 9,112
	interest revenue		$ 9,112
	(To record interest revenue)

Date	Acccounts titls and explantion	Debit($)	Credit($)
31-dec-22	cash	$ 25,000
	notes receivable		$ 25,000
	(to record instalment received)
31-dec-22	Discount on notes receivable	$ 7,205
	interest revenue		$ 7,205
	( To record interest revenue)