Question
Delta sold a piece of equipment at the beginning of 2020, receiving a $10,000, two-year 1% (annual coupon rate) note. Interest is paid at the
Delta sold a piece of equipment at the beginning of 2020, receiving a $10,000, two-year 1% (annual coupon rate) note. Interest is paid at the end of each year. The market interest rate for this kind of note is 6%. Round to the nearest dollar.
Required:
- Calculate the present value of the note receivable. You may use the present value tables at the end of the or your financial calculator.(2 marks)
- Prepare entry to record the sale of equipment by Delta. (2 marks)
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| Debit | Credit |
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- Prepare the entry to record the interest collection by Delta at the end of 2020. (2 marks)
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| Debit | Credit |
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Healthcare And Medical Office Accounting
Authors: Wayne A. Label, Weldon E. Havins
2nd Edition
0986099805, 978-0986099809
