(Answered) Question - on december 31 2017 blossom company borrowed

Accounting

Question - On December 31, 2017, Blossom Company borrowed $71,214 from Paris Bank, signing a 5-year, $120,000 zero-interest-rate note. The note was issued to yield 11% interest. Unfortunately, during 2019, Blossom began to experience financial difficulty. As a result, at December 31, 2019, Paris Bank determined that it was probable that it would collect only $90,000 at maturity. The market rate of interest on loans of this nature is now 12%.

Required - Prepare the entry on March 31, 2020, if Paris learns that Blossom will be able to repay the loan under the original terms.

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