Question
Long-Term Notes Receivable and TVM.Use the following present value tables to help answer the following questions. * Do not round any answer until your final
Long-Term Notes Receivable and TVM.Use the following present value tables to help answer the following questions.
*Do not round any answer until your final answer.Round your final answer to the nearest whole dollar.When entering your final answer,do not use commas or $ sign.(Sorry...Blackboard is very sensitive and will mark your answer incorrect due to rounding and punctuation.)
PV of $1Periods359104%.89.82.70.686%.84.74.59.568%.79.68.50.469%.77.65.46.42
Present Value of anOrdinary Annuity4% 2.774.457.438.116%2.674.216.807.368%2.573.996.256.719%2.533.895.996.41
Part I.On April 1, 2020, ABC Company rendered services to Jones Company in exchange for a three year, $400,000, 8% note.Payments of P&I (Principal & Interest) are due each April 1st, with the first payment due immediately.December 31st is the fiscal year end for ABC.Jones' normal cost to borrow is 8%.
Required:Use the above information to answer the next (4) questions:
1.Determine the dollar amount of the cash payment of P&I to be remitted each April 1st:$[Question_1]2.Determine the Service Revenue ABC can recognize on April 1, 2020.
$__________________________________________3.Determine the Total Interest Revenue that ABC will recognize on this note for the year ended December 31, 2021.$_____________________________________4.Prepare a partial Balance Sheet for this Note Receivable as of December 31, 2020:Current Assets:
Interest Receivable$_____________________
Note Receivable$_____________________
Long-Term Investments:
Note Receivable$_____________________
(A) Determine the dollar amount of the cash payment of P&I to be remitted each April 1st: $_______________?
(B) Using the information presented in #1 above,determine the amount of Service Revenue that ABC should recognize on April 1, 2020...................?
(C)Using the information presented in #1above,determine what amount of Interest Revenue ABC should recognize from this note for the year ending December 31, 2021.$___________________________________
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