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On July 1, Orange Assoc. sold equipment to Apple and agreed to accept a 4-month, $80,000, 12% interest-bearing note in payment at a time when

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On July 1, Orange Assoc. sold equipment to Apple and agreed to accept a 4-month, $80,000, 12% interest-bearing note in payment at a time when the prevailing rate of interest for similar transactions was 12%. When the note was collected upon maturity, Orange would recognize interest revenue of: 9.600 3,200 6,400

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