Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On January 1, 2020, Company A made a loan to Company B and receives in exchange a five- year, $200,000 note bearing interest at 6%

image text in transcribed

On January 1, 2020, Company A made a loan to Company B and receives in exchange a five- year, $200,000 note bearing interest at 6% annually. The market rate of interest for a note of similar risk is 12%. Interests are received semiannually on July 1 and January 1; the first one will be received on July 1, 2020. How much interest revenue should be recorded by Company A on July 1, 2020? (Round your final answer to the nearest dollar; do not include dollar sign and comma) Present value table factors are: Present value of 1 for 5 periods at 6% 0.74726 Present value of 1 for 5 periods at 12% 0.56743 Present value of 1 for 10 periods at 3% 0.74409 Present value of 1 for 10 periods at 6% 0.55839 Present value of an ordinary annuity of 1 for 5 periods at 6% 4.21236 Present value of an ordinary annuity of 1 for 5 periods at 12% 3.60478 Present value of an ordinary annuity of 1 for 10 periods at 3% 8.53020 Present value of an ordinary annuity of 1 for 10 periods at 6% 7.36009

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The International Corporate Governance System Audit Roles And Board Oversight

Authors: F. Lessambo

1st Edition

134947178X, 978-1349471782

More Books

Students also viewed these Accounting questions

Question

B + S 1 : . . What are the main financial statements, and what inf

Answered: 1 week ago