Problem 7-09 Vaughn Inc. had the following long-term receivable account balances at December 31, 2019. Note receivable from sale of division Note receivable from officer $2,100,000 492,900 Transactions during 2020 and other information relating to Vaughn's long-term receivables were as follows. 1. 2. 3. The $2,100,000 note receivable is dated May 1, 2019, bears interest at 10%, and represents the balance of the consideration received from the sale of Vaughn's electronics division to New York Company. Principal payments of $700,000 plus appropriate interest are due on May 1, 2020, 2021, and 2022. The first principal and interest payment was made on May 1, 2020. Collection of the note installments is reasonably assured. The $492,900 note receivable is dated December 31, 2019, bears interest at 9%, and is due on December 31, 2022. The note is due from Sean May, president of Vaughn Inc. and is collateralized by 12,323 shares of Vaughn's common stock. Interest is payable annually on December 31, and all interest payments were paid on their due dates through December 31, 2020. The quoted market price of Vaughn's common stock was $44 per share on December 31, 2020. On April 1, 2020, Vaughn sold a patent to Pennsylvania Company in exchange for a $124,000 zero-interest-bearing note due on April 1, 2022. 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, 2020, was 10%. The present value of $1 for two periods at 10% is 0.826 (use this factor). The patent had a carrying value of $49,600 at January 1, 2020, and the amortization for the year ended December 31, 2020, would have been $9,920. The collection of the note receivable from Pennsylvania is reasonably assured. On July 1, 2020, Vaughn sold a parcel of land to Splinter Company for $200,000 under an installment sale contract. Splinter made a $60,000 cash down payment on July 1, 2020, and signed a 4-year 9% note for the $140,000 balance. The equal annual payments of principal and interest on the note will be $45,125 payable on July 1, 2021, through July 1, 2024. The land could have been sold at an established cash price of $200,000. The cost of the land to Vaughn was $150,000. Circumstances are such that the collection of the installments on the note is reasonably assured. VAUGHN INC. Long-Term Receivables Section of Balance Sheet LINK TO TEXT Prepare a schedule showing the current portion of the long-term receivables and accrued interest receivable that would appear in Vaughn's balance sheet at December 31, 2020. (Round answers to 0 decimal places, e.g. 5,129.) VAUGHN INC. Selected Balance Sheet Balances Prepare a schedule showing interest revenue from the long-term receivables that would appear on Vaughn's income statement for the year ended December 31, 2020. (Round answers to 0 decimal places, e.g. 5,125.) VAUGHN INC. Interest Revenue from Long-Term Receivables Accrued interest receivable Current portion of long-term receivables Installment contract receivable Interest revenue Note receivable from officer Note receivable from sale of division Note receivable from sale of patent Total accrued interest receivable Total current portion of long-term receivables Total interest revenue Total long-term receivables Problem 7-09 Vaughn Inc. had the following long-term receivable account balances at December 31, 2019. Note receivable from sale of division Note receivable from officer $2,100,000 492,900 Transactions during 2020 and other information relating to Vaughn's long-term receivables were as follows. 1. 2. 3. The $2,100,000 note receivable is dated May 1, 2019, bears interest at 10%, and represents the balance of the consideration received from the sale of Vaughn's electronics division to New York Company. Principal payments of $700,000 plus appropriate interest are due on May 1, 2020, 2021, and 2022. The first principal and interest payment was made on May 1, 2020. Collection of the note installments is reasonably assured. The $492,900 note receivable is dated December 31, 2019, bears interest at 9%, and is due on December 31, 2022. The note is due from Sean May, president of Vaughn Inc. and is collateralized by 12,323 shares of Vaughn's common stock. Interest is payable annually on December 31, and all interest payments were paid on their due dates through December 31, 2020. The quoted market price of Vaughn's common stock was $44 per share on December 31, 2020. On April 1, 2020, Vaughn sold a patent to Pennsylvania Company in exchange for a $124,000 zero-interest-bearing note due on April 1, 2022. 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, 2020, was 10%. The present value of $1 for two periods at 10% is 0.826 (use this factor). The patent had a carrying value of $49,600 at January 1, 2020, and the amortization for the year ended December 31, 2020, would have been $9,920. The collection of the note receivable from Pennsylvania is reasonably assured. On July 1, 2020, Vaughn sold a parcel of land to Splinter Company for $200,000 under an installment sale contract. Splinter made a $60,000 cash down payment on July 1, 2020, and signed a 4-year 9% note for the $140,000 balance. The equal annual payments of principal and interest on the note will be $45,125 payable on July 1, 2021, through July 1, 2024. The land could have been sold at an established cash price of $200,000. The cost of the land to Vaughn was $150,000. Circumstances are such that the collection of the installments on the note is reasonably assured. VAUGHN INC. Long-Term Receivables Section of Balance Sheet LINK TO TEXT Prepare a schedule showing the current portion of the long-term receivables and accrued interest receivable that would appear in Vaughn's balance sheet at December 31, 2020. (Round answers to 0 decimal places, e.g. 5,129.) VAUGHN INC. Selected Balance Sheet Balances Prepare a schedule showing interest revenue from the long-term receivables that would appear on Vaughn's income statement for the year ended December 31, 2020. (Round answers to 0 decimal places, e.g. 5,125.) VAUGHN INC. Interest Revenue from Long-Term Receivables Accrued interest receivable Current portion of long-term receivables Installment contract receivable Interest revenue Note receivable from officer Note receivable from sale of division Note receivable from sale of patent Total accrued interest receivable Total current portion of long-term receivables Total interest revenue Total long-term receivables