Question
On January 1, 2018, Tustumena Company purchased a used tractor. Tustumena paid $4,000 down and signed a noninterest-bearing note requiring $20,000 to be paid on
On January 1, 2018, Tustumena Company purchased a used tractor. Tustumena paid $4,000 down and signed a noninterest-bearing note requiring $20,000 to be paid on December 31, 2020. The fair value of the tractor is not determinable. An interest rate of 5% properly reflects the time value of money for this type of loan agreement. The company's fiscal year-end is December 31.
Question
The year-end reported value of the Note Payable net the Discount for 2018 would be:
| $20,952 | ||
| $22,800 | ||
| $17,277 | ||
| $18,141 |
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An Auditors Guide To Auditing Financial Statements In The UK
Authors: Steve Collings
1st Edition
1526527480, 978-1526527486
