All note payments include interest

Stated rate of interest = Market rate of interest for all notes

except Non-interest bearing notes.

Transaction: Note 10:

4/30/20 Sold Equipment that has an cost of $190,000;

The company receivedin exchange a Note Which requires 4 annual payments of $90,000The first payment on the note occurs 04/30/20.

The market rate of interest for the note is 4%.

Are we using PVOA OR PVAD and why ?

Requirement A:

Record the original transaction, for the seller.

Record the transactions through 04/30/23

04/30/2020

04/30/2021

04/30/2022

04/30/2023

Requirement B:

Record the original transaction, for the purchaser.

Record the transactions through 04/30/23

04/30/2020

04/30/2021

04/30/2022

04/30/2023

Requirement C: What is the impact on Classified Balance Sheet 2021 and Income Statement 2021 ?