Question
On January 1, 20X1, a Company purchased a piece of equipment by signing a note with a below market rate of interest. The facts of
On January 1, 20X1, a Company purchased a piece of equipment by signing a note with a below market rate of interest. The facts of the transaction are shown below.
| Note payable | $ 200,000 |
| Fair value | $ 164,000 |
| Note term | 5 years |
| Coupon rate | 1.4% |
The note is due in equal annual payments of principle and interest.
2) What is the interest expense for the year ended December 31, 20X1?
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Sound Investing, Chapter 17 - Off-Balance-Sheet Shams
Authors: Kate Mooney
1st Edition
0071719393, 9780071719391
