Question
On January 1, 2018, Amanda loaned $112,695 to Edward. A zero-interest-bearing note (face amount, $150,000) was exchanged solely for cash. The note is to be
On January 1, 2018, Amanda loaned $112,695 to Edward. A zero-interest-bearing note (face amount, $150,000) was exchanged solely for cash. The note is to be repaid in three years. The prevailing rate of interest for a loan of this type is 10%. The present value of $150,000 at 10% for three years is $112,695. What amount of interest income should Amanda recognize in 2018?
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Fundamentals of Cost Accounting
Authors: William Lanen, Shannon Anderson, Michael Maher
5th edition
978-1259728877, 1259728870, 978-1259565403
