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1/1/2020: Chi Company purchased a 10% three-year, $100,000 note receivable from Norton Company. The effective interest rate is 12%. Answer the following questions: a) What
1/1/2020: Chi Company purchased a 10% three-year, $100,000 note receivable from Norton Company. The effective interest rate is 12%. Answer the following questions: a) What is the price of the note at 1/1/2020 that Chi paid Norton? (the price of the note is the present value of future cash flows generated by the note). Show your calculation. b) What is the journal entry by Chi Company to record the note on 1/1/2020? c) What is the interest revenue received from the note on 12/31/2020? Journalize the entry to record the cash received and interest revenue on the book of Chi Company on 12/31/2020? (use the TVM tables attached) TVM Tables.pdf
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