Question
In exchange for lending cash, you have a note receivable with a face value (principle) of 10,000, no coupon, and a term of 3 years.
In exchange for lending cash, you have a note receivable with a face value (principle) of 10,000, no coupon, and a term of 3 years. Market interest is 8%. The exchange occured on Jan 1, 2018. Fiscal year end is Dec 31st. The firm uses effective interest to amortize any discounts.
Round to the nearest dollar.
What is the net value of the note receivable on Dec 31, 2018?
What is the value of the related interest revenue on Dec 31, 2019?
What is the value in the Discount on Note Receivable Account on Dec 31, 2020?
*please show or give explanations/work*
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Horngrens Accounting
Authors: Tracie L. Miller Nobles, Brenda L. Mattison, Ella Mae Matsumura, Carol A. Meissner, Jo Ann L. Johnston, Peter R. Norwood
10th Canadian edition Volume 1
978-0133855371
