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On December 31, 2017, Seller Company sold goods to Buyer Company and in return received a $40,000 3- year note. Assume that the note is
On December 31, 2017, Seller Company sold goods to Buyer Company and in return received a $40,000 3- year note. Assume that the note is a zero-interest bearing note and that Buyer Company's borrowing rate is 8%. The present value factor or an ordinary annuity at 8% for 3 periods is 2.57710 and the present value factor for a single sum at 8% for 3 periods is .79383.
How much TOTAL interest revenue will Seller Company recognize over the 3-year period of the note?
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