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Question 17 Crane Company loaned $52,893 to Hemingway, Inc, accepting Hemingway's 2-year, $64,000, zero-interest-bearing note. The...

Question 17

Crane Company loaned $52,893 to Hemingway, Inc, accepting Hemingway's 2-year, $64,000, zero-interest-bearing note. The implied interest rate is 10%. Prepare Crane's journal entries for the initial transaction, recognition of interest each year, and the collection of $64,000 at maturity. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Account Titles and Explanation

Debit

Credit
(To record the receipt of the note at a discount.)
(To record the interest revenue at the end of 1st year.)
(To record the interest revenue at the end of 2nd year.)
(To record receipt of notes.)
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The answer has been presented in the supporting sheet. For detailed answer refer to the supporting sheet,

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