Pearl Inc. had the following long-term receivable account balances at December 31, 2016. Note receivable from sale of division Note receivable from officer $1,500,000 441,000 Transactions during 2017 and other information relating to Pearl's long-term receivables were as follows. 1. The $1,500,000 note receivable is dated May 1, 2016, bears interest at 8%, and represents the balance of the consideration received from the sale of Pearl's electronics division to New York Company. Principal payments of $500,000 plus appropriate interest are due on May 1, 2017, 2018, and 2019. The first principal and interest payment was made on May 1, 2017. Collection of the note installments is reasonably assured The $441,000 note receivable is dated December 31, 2016, bears interest at 7%, and is due on December 31, 2019. The note is due from Sean May, president of Pearl Inc. and is collateralized by 11,025 shares of Pearl's common stock. Interest is payable annually on December 31, and all interest payments were paid on their due dates through December 31, 2017. The quoted market price of Pearl's common stock was $46 per 2. 3. On April 1, 2017, Pearl sold a patent to Pennsylvania Company in exchange for a $111,000 zero-interest bearing note due on April 1, 2019. There was no established exchange price for the patent, and the note had no ready market. The prevailing rate of interest for a note of this type at April 1, 2017, was 14%. The present value of$1 for two periods at 14% is 0.769 (use this factor). The patent had a carrying value of $44,400 at January 1, 2017, and the amortization for the year ended December 31, 2017, would have been $8,880. The collection of the note receivable from Pennsylvania is reasonably assured On July 1, 2017, Pearl sold a parcel of land to Splinter Company for $209,200 under an installment sale contract. Splinter made a $62,760 cash down payment on July 1, 2017, and signed a 4-year 13% note for the $146,440 balance. The equal annual payments of principal and interest on the note will be $42,931 payable on July 1, 2018, through uly 1, 2021 . The land could have been sold at an established cash price of $209,200. The cost of the land to Pearl was $159,200. Circumstances are such that the collection of the installments on the note is reasonably assured 4. Prepare a schedule showing the current portion of the long-term receivables and accrued interest receivable that would appear in Pearl's balance sheet at December 31, 2017. (Round answers to O decimal places, e.g. 5,129.) PEARL INC. Selected Balance Sheet Balances December 31, 2017 Prepare a schedule showing interest revenue from the long-term receivables that would appear on Pearl's income statement for the year ended December 31, 2017. (Round answers to O decimal places, e.g. 5,125.) PEARL INC. Interest Revenue from Long-Term Receivables Click if you would like to Show Work for this question: Open Show Work
