Income from Note Receivable On January 1, 2000, Ester Corporation loaned $161,986 to Topper Company on a 4-year note receivable with a 9 percent annual interest rate. Topper agreed to pay Ester Corporation $50,000 on December 31 each year.

a. Compute the amount of interest income recorded by Ester Corporation in each of the 4 years and the balance of the note receivable at December 31 each year.

b. What is the total amount recorded as interest income over the 4-year period?

c. If Ester Corporation had an opportunity to sell the note receivable to a bank for $85,000 on January 1, 2002, would it report a gain or loss on the sale? What amount would be reported?