Question
On June 30, 2016, Kimberly Farms purchased custom-made harvesting equipment from a local producer. In payment, Kimberly signed a noninterest-bearing note requiring the payment of
On June 30, 2016, Kimberly Farms purchased custom-made harvesting equipment from a local producer. In payment, Kimberly signed a noninterest-bearing note requiring the payment of $74,000 in two years. The fair value of the equipment is not known, but an 7% interest rate properly reflects the time value of money for this type of loan agreement.
A) what is the present value?
| B) How much interest expense will Kimberly recognize in its income statement for this note for the year ended December 31, 2016? | |
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Auditing And Assurance Services
Authors: David Ricchiute
5th Edition
0538869526, 978-0538869522
