Question

Practice Assignment Gradebook ORION Downloadable eTextbook ment CALCULATOR MESSAGE MY INSTRUCTOR FULL SCREEN PRINTER VERSION BACK NEXT On January 1, 2020, Bridgeport Co. borrowed and received $474,000 from a major customer evidenced by a nero-interest-bearing note due in 5 years. As consideration for the zero-interest-bearing feature, Bridgeport agrees to supply the customer's Inventory needs for the loan period at lower than the market price. The appropriate rate at which to impute interest is (a) Prepare the journal entry to record the initial transaction on January 1, 2020 (b) Prepare the journal entry to record any adjusting entries needed at December 31, 2020. Assume that the sales of Bridgeport's product to this customer occur evenly over the 5-year period (Round present value factor calculations to 5 decimal places, e.. 1.25124 and the final answer to decimal places e.g. 58,971. If he entry is required, select "No Entry for the account titles and enter for the amounts Credit account titles are automatically indented when amount is entered. Do not indent manually) No Date Account Titles and Explanation Debit () Zon. 1, 2020 Cash 474000 Discount on Notes Payable 151403.56 1 Notes Payable n edas Revenu (1) Dec 31, 2020 Interest Expense 1 Discount on Notes Paya (Te record Interest Expense) Unearned Sales Revenue Dec. 31, 2020 3 20280.7 Unearned Sales Revens (To record Uneamed Sales Revenue) a Rints Reserved. A Division of Sohn Wiley & Sons, Inc.

Answer 1

No.	Date	Account titles and explanation	Debit	Credit
b)	Dec. 31, 2018	Interest expense (474000*8%)	37920
		Discount on notes payable		37920
		(to record interest expense)
	Dec. 31, 2018	Unearned sales revenue	30280.70
		Sales revenue		30280.70
		(to record unearned sales revenue)