*Problem 7-9 Crane Inc. had the following long-term receivable account balances at December 31, 2016 Note receivable from sale of division Note receivable from officer $1,500,000 431,000 Transactions during 2017 and other information relating to Crane's long-term receivables were as follows. The $1,500,000 note receivable is dated May 1, 2016, bears interest at 10%, and represents the balance of the consideration received from the sale of Crane'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 1. 2. The $431,000 note receivable is dated December 31, 2016, bears interest at 9%, and is due on December 31, 2019, The note is due from Sean May, president of Crane Inc. and is collateralized by 10,775 shares of Crane'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 Crane's common stock was $45 per share on December 31, 2017 On April 1, 2017, Crane sold a patent to Pennsylvania Company in exchange for a $103,000 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 12%. The present value of $1 for two periods at 12% is 0.797 (use this factor). The patent had a carrying value of $41,200 at January 1, 2017, and the amortization for the year ended December 31, 2017, would have been $8,240 The collection of the note receivable from Pennsylvania is reasonably assured 3. On July 1, 2017, Crane sold a parcel of land to Splinter Company for $212,400 under an installment sale contract. Splinter made a $63,720 cash down payment on July 1, 2017, and signed a 4-year 11% note for the $148,680 balance. The equal annual payments of principal and interest on the note will be $41,207 payable on July 1, 2018, through July 1, 2021. The land could have been sold at an established cash price of $212,400. The cost of the land to Crane was $162,400. Circumstances are such that the collection of the installments on the note is reasonably assured 4. *Problem 7-9 Crane Inc. had the following long-term receivable account balances at December 31, 2016 Note receivable from sale of division Note receivable from officer $1,500,000 431,000 Transactions during 2017 and other information relating to Crane's long-term receivables were as follows. The $1,500,000 note receivable is dated May 1, 2016, bears interest at 10%, and represents the balance of the consideration received from the sale of Crane'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 1. 2. The $431,000 note receivable is dated December 31, 2016, bears interest at 9%, and is due on December 31, 2019, The note is due from Sean May, president of Crane Inc. and is collateralized by 10,775 shares of Crane'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 Crane's common stock was $45 per share on December 31, 2017 On April 1, 2017, Crane sold a patent to Pennsylvania Company in exchange for a $103,000 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 12%. The present value of $1 for two periods at 12% is 0.797 (use this factor). The patent had a carrying value of $41,200 at January 1, 2017, and the amortization for the year ended December 31, 2017, would have been $8,240 The collection of the note receivable from Pennsylvania is reasonably assured 3. On July 1, 2017, Crane sold a parcel of land to Splinter Company for $212,400 under an installment sale contract. Splinter made a $63,720 cash down payment on July 1, 2017, and signed a 4-year 11% note for the $148,680 balance. The equal annual payments of principal and interest on the note will be $41,207 payable on July 1, 2018, through July 1, 2021. The land could have been sold at an established cash price of $212,400. The cost of the land to Crane was $162,400. Circumstances are such that the collection of the installments on the note is reasonably assured 4