(Impairments) On December 31 2014 Iva Majol

(Impairments) On December 31 2014 Iva Majoli Company bor r owed $62092 f r om Paris Bank signing a 5-year $100000 zero-interest-bearing note. The note was issued to yield 10% interest. Unfortu- nately during 2016 Majoli began to experience financial difficulty. As a result at December 31 2016 Paris Bank determined that it was probable that it would receive back only $75000 at maturity. The market rate of interest on loans of this nature is now 11%. Instructions (a) P r epa r e the entry to r eco r d the issuance of the loan by Paris Bank on December 31 2014. (b) P r epa r e the entr y if an y to r eco r d the impairment of the loan on December 31 2016 by Paris Bank.

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