Carla Vista Inc. provided several entertainment services to Whispering Winds Corporation in the past. On January 1, 2023, when the receivable for the past services was due, Whispering Winds was unable to pay the outstanding balance. Carla Vista agreed to accept a $500,000 non-interest bearing note payable on December 31, 2024. Whispering Winds typically could arrange this kind of financing at an interest rate of 15%.

Carla Vista Inc. provided several entertainment services to Whispering Winds Corporation in the past. On January 1, 2023, when the receivable for the past services was due, Whispering Winds was unable to pay the outstanding balance. Carla Vista agreed to accept a $500,000 non-interest bearing note payable on December 31, 2024. Whispering Winds typically could arrange this kind of financing at an interest rate of 15%.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Note:-

Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.
Answer completely.
You will get up vote for sure.

(b)
-
Your answer is partially correct.
Prepare the journal entry to record this transaction for Carla Vista Inc. on Jan 1, 2023. (Credit account titles are
automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the
account titles and enter O for the amounts. List all debit entries before credit entries. Round answers to 0 decimal places, e.g.
8,971.)
Date Account Titles and Explanation
Jan.
1,
2023
note receivable
interest receivable
Debit
378072
Credit
378072

Carla Vista Inc. provided several entertainment services to Whispering Winds Corporation in the past. On January 1, 2023,
when the receivable for the past services was due, Whispering Winds was unable to pay the outstanding balance. Carla Vista
agreed to accept a $500,000 non-interest bearing note payable on December 31, 2024. Whispering Winds typically could
arrange this kind of financing at an interest rate of 15%.
Click here to view the factor table PRESENT VALUE OF 1.
Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1.
(a)
Use 1. PV.1 Tables, 2. a financial calculator, or 3. Excel functions to arrive at the amount to record the note receivable.
(Round present value factor calculations to 5 decimal places, e.g. 1.2512. Round PV tables and Excel function answers to O decimal
places, e.g. 8,971 and round Financial calculator answer to 2 decimal places, e.g. 89.71.)
3
1.
2.
Your answer is correct.
3.
Using
PV tables
Financial calculator
Excel function
LA
Note receivable
378071.83
378071.84
378071.83
Ih

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