LO6,7 Determine how much interest income Later Federal Loan Company, a cash basis taxpayer, must recognize on
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LO6,7 Determine how much interest income Later Federal Loan Company, a cash basis taxpayer, must recognize on each of the following loans in 2010:
a. A $10,000, 8.5%, 6-month loan made on October 1, 2010. The principal and interest are due on April 1, 2011.
b. A $10,000, 6-month loan, discounted at 8% on October 1, 2010. Later gives the borrower $9,615, and the borrower must repay the $10,000 face amount on April 1, 2011.
c. A $10,000, 2-year loan, discounted at 6% on October 1, 2010. Later gives the borrower $8,900; the $10,000 face amount is to be repaid on October 1, 2012.
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Related Book For
Concepts In Federal Taxation 2011
ISBN: 9780538467926
18th Edition
Authors: Kevin E. Murphy, Mark Higgins
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