Cullumber Corporation issued a 4-year, $70,000, zero-interest-bearing note to Brown Company on January 1, 2020, and received cash of $44,486. The implicit interest rate is 12% Prepare Cullumber's journal entries for (a) the January 1 issuance and (b) the December 31 recognition of interest. (Round answers to 0 decimal places, eg 38,548. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually)
Cullumber Corporation issued a 4-year, $70,000, zero-interest-bearing note to Brown Company on January 1, 2020, and received cash of $44,486. The implicit interest rate is 12% Prepare Cullumber's journal entries for (a) the January 1 issuance and (b) the December 31 recognition of interest. (Round answers to 0 decimal places, eg 38,548. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Cullumber Corporation issued a 4-year, $70,000, zero-interest-bearing note to Brown Company on January 1, 2020, and received
cash of $44,486. The implicit interest rate is 12%.
Prepare Cullumber's journal entries for (a) the January 1 issuance and (b) the December 31 recognition of interest. (Round answers to 0
decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are
automatically indented when amount is entered. Do not indent manually)
Account Titles and Explanation
No.
(a)
(b)
Date
Debit
10000
Cred
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