Question
n December 31, 2017, Jones Builders Incorporated received a note receivable for stadium repairs provided to Lambeau Leap Company. The 4 year note had a
n December 31, 2017, Jones Builders Incorporated received a note receivable for stadium repairs provided to Lambeau Leap Company. The 4 year note had a face value of $400,000. The stated rate on the note was 9%. The market rate, at the time of issuance, for notes of this kind was 12%. Jones Builders correctly calculated the present value of the note to be $363,552.60. Interest on the note is paid annually, beginning December 31, 2018. The face value will be paid at maturity. Jones Builders uses the effective-interest method to amortize discounts and/or premiums.
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Prepare the journal entry for Jones Builders for December 31, 2017. (Explanation not required)
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What is the total amount of interest revenue related to this note that Jones Builders will record over the entire 4 year period?
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What amount of interest revenue should Jones Builders record in 2019 related to this note?
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