Question
On January 1, 20X3, Gaudreau Enterprises sold goods in exchange for a $200,000, fiveyear interest-free note from the purchaser. The note was repayable at $40,000
On January 1, 20X3, Gaudreau Enterprises sold goods in exchange for a $200,000, fiveyear interest-free note from the purchaser. The note was repayable at $40,000 per annum, with the first payment due on December 31, 20X3. The market rate of interest for similar notes was 6% per annum. Gaudreau Enterprises only records adjusting entries at year end.
What amount of interest revenue should Gaudreau Enterprises accrue at its December 31, 20X3, year end?
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Financial and Managerial Accounting the basis for business decisions
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
16th edition
0077664078, 978-0077664077, 78111048, 978-0078111044
