Record Note Receivable on January 1, 2020, Jumpstart Corp

question 114

Essay

Record note receivable On January 1, 2020, Jumpstart Corp. makes a loan to TryStar Company and receives a $100,000, five-year note bearing interest at 4% semi-annually The market rate for similar loans (with similar credit risk) is 6%.
Instructions
A) Calculate the present value (fair value) of this loan (round to the nearest dollar).
B) Prepare the journal entry to record this transaction.

• A) Calculate the present value (fair value) of this loan (round to the nearest dollar).
• B) Prepare the journal entry to record this transaction.

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Definitions:

Zero Correlation

A statistical term indicating no relationship between two variables, meaning changes in one variable do not predict changes in the other.

Heel Height

The measurement from the bottom of the shoe sole to the bottom of the heel, indicating the elevation provided by the heel of a shoe.

Biased

Showing an unfair tendency to believe that some people, ideas, etc., are better than others, which can affect judgment and decision-making.

Representative

A person chosen or appointed to act or speak for another or others, often in decision-making processes.