1 12 Lester Company received a seven - year zero interest - bearing note on February 22 , 2014 in exchange for property it sold to Porter Company . There was no established exchange price for this property and the note has no ready market . The prevailing rate of interest to rate of interest for a note of this type was 7/ on February 22 2014 , 75% on December 31 , 2014 , 7 7/ 01 February 22 , 2015 , and 8 % on December 31 , 2015 . What interest rate should be used to calculate the interest revenue from this transaction for the years ended December 31 2014 and 2015 , respectively ? 2 0 / and 0 % b . 70% and 70% C . 70% and 7 70% 5% and 8/