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On January 1, 2024, Byner Company purchased a used tractor. Byner paid $2,000 down and signed a noninterest-bearing note requiring $29,000 to be paid on
On January 1, 2024, Byner Company purchased a used tractor. Byner paid $2,000 down and signed a noninterest-bearing note requiring $29,000 to be paid on December 31, 2026. The fair value of the tractor is not determinable. An interest rate of 10% properly reflects the time value of money for this type of loan agreement. The companys fiscal year-end is December 31.
- How much interest expense will the company include in its 2024 and 2025 income statements for this note?
- What is the amount of the liability the company will report in its 2024 and 2025 balance sheets for this note?
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