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On January 1, Investor purchased a 9 year, $400,000; 4% note from Borrower. The yield...

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Accounting

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. (record at present values)

For Investor:

  1. Record the journal necessary on January

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 3

6.Record the journal necessary on the following January 1.

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