Incorrect spelling, explanation: there should be a double l in balloon, so baloon is a mistake. This is due to the origins of this word (French ballon and Italian pallone, both spelled with a double l). The English spelling balloon in which there are also two o’s is explained by the suffix -oon added to some of the French-borrowed words in English.

Correct spelling, explanation: balloon is the correct form because it was directly borrowed from the French word ballon, so also spelled with a double l. The French word goes back to the Italian pallone (as you can see even this older form had a double l). These examples point to balloon as the correct form and at the same time baloon is incorrect – it should have two consonants l. Also, the suffix -oon is used to emphasize words of French origin, which explains why there is one o in French and two in English form.

Definition of balloon:
noun, an inflated object, usually a toy; also: type of a tourist attraction
Have you ever flown in a hot-air balloon?
We bought 30 balloons for her 30th birthday.

Collocations with balloon:
helium balloon
The birthday party would not be complete without the release of colorful helium balloons.
water balloon
The children giggled as they took turns throwing water balloons at each other.
hot-air balloon
The tranquil hot-air balloon ride offered breathtaking views of the surrounding landscape.
go up in a balloon
The family was excited to go up in a balloon for the first time and see the world from above.
blow up / inflate a balloon
The clown made balloon animals by expertly blowing up balloons and twisting them into shapes.
burst / pop a balloon
The sound of a burst balloon made everyone jump in surprise.

Incorrect spelling

Incorrect spelling