Question

Kingbird Corporation issued a 5-year, $68,000, zero-interest-bearing note to Garcia Company on January 1, 2020, and received cash of $68,000. In addition, Kingbird agreed to sell merchandise to Garcia at an amount less than regular selling price over the 5-year period. The market rate of interest for similar notes is 12%.

Prepare Kingbird Corporation’s January 1 journal entry. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answer 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.)

Date	Account Titles and Explanation	Debit	Credit
January 1, 2020	Cash	68000
	Discount on Notes Payable	29415
	Notes Payable

I need help, to fill the rest of the journal entry. (it is not Unearned Revenue)

Answer 1

issue price of bonds = 68000*0.56743 = 38585

Prepare Kingbird Corporation’s January 1 journal entry. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answer 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.)

Date	Account Titles and Explanation	Debit	Credit
January 1, 2020	Cash	38585
	Discount on Notes Payable	29415
	Notes Payable		68000