Financing Sale to Customer Crazy Hal’s Furniture Warehouse submitted the low bid to provide office furniture for a new building. Under the terms offered, the buyer signed a 2-year noninterest-bearing note on January 1, 2000, that requires the buyer to pay Crazy Hal’s Furniture Warehouse $200,000 on December 31, 2001. Both parties agree that a 10 percent rate of interest on such notes is appropriate.

The present value of the $200,000 payment at January 1, 2000 is $165,290.

a. What amount should Crazy Hal’s Furniture Warehouse record as sales revenue on January 1, 2000?

b. What amount of discount on notes receivable should be recorded on January 1, 2000?

c. What amount of interest income should be reported by Crazy Hal’s Furniture Warehouse in 2000 and 2001?