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Prepare the journal entries to record the transaction

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Question - Notes Receivable - On December 31, 2021 Everest Inc. provided service to Climbers Attire Company, accepting a six percent, five-year promissory note having a maturity value of $800,000 (interest payable annually on December 31}. Everest Inc. pays 7 percent for its borrowed funds. Climbers Attire, however, because it is considered a higher risk, pays 9 percent for its borrowed funds.

Required -

(a) Prepare the journal entries to record the transaction on the books of Everest Inc. at December 31, 2021. (Assume that the effective interest method is used.) Tables are provided at the end of the exam.

(b) Make all appropriate entries for 2021 on the books of Everest Inc.

Reference no: EM133085582

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