how did we calculate discount amount on 12/31/15 and 12/31/16?

New Revenue Recognition Standard - Step 3 Transaction Price (cntd.) eeds one year), the instrument of an Significant Financing Component and the Time Value of Money When a significant financing component is involved i.e. the payment period exceeds one year goal is to recognize revenue in an amount equal to the cash selling price of the good or service amount recognized as revenue can be determined using an imputed rate of interest or valuine consideration received. The imputed rate is either 1) the prevailing rate for a similar instrumen issuer with a similar credit rating, or 2) a rate of interest that discounts the face amount of the instrument (note receivable) to the current sales price of the good or service. P18-3 d): Jocal home of $6.99 Yy=8 Time Value of Money example (based on P18-3 d): On January 1, 2015, Allied Appliances sold a stove to a local home builder. Allied Appliance accepted a two-year, zero-interest bearing note with a face amount of $6,998. The stove has an inventory cost of $5,000. An interest rate of 8% is an appropriate rate of interest for this custama Prepare journal entries on January 1, 2015 and December 31, 2015, December 31, 2016, and Janus 1, 2017. mkt reate 1/1/15: FV = 6998 Notes Receivable $6,998 noz Sales revenue $6,000 Discount on Notes Receivable 998 PT CV boo Cost of goods sold $5,000 Inventory $5,000 12/31/15: Discount on notes receivable $480 Interest revenue $480 12/31/16: Discount on notes receivable $518 Interest revenue $518 1/1/17: Cash $6,998 Notes receivable $6,998 Noncash Consideration Entities should recognize revenue based on the fair value of the goods, services or other noncash consideration received. If this amount cannot be determined, the entity should estimate the selling price of the goods or services and recognize it as revenue.s 1400 example)