Problem 7-9 (Part Level Submission) Bonita Inc. had the following long-term receivable account balances at December 31, 2016. Note receivable from sale of division Note receivable from officer $2,100,000 423,000 Transactions during 2017 and other information relating to Bonita's long-term receivables were as follows. 1. 2. 3. The $2,100,000 note receivable is dated May 1, 2016, bears interest at 9%, and represents the balance of the consideration received from the sale of Bonita's electronics division to New York Company. Principal payments of $700,000 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 $423.000 note receivable is dated December 31, 2016, bears interest at 8%, and is due on December 31, 2019. The note is due from Sean May, president of Bonita Inc. and is collateralized by 10,575 shares of Bonita'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 Bonita's common stock was $46 per share on December 31, 2017. On April 1, 2017, Bonita sold a patent to Pennsylvania Company in exchange for a $136,000 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 13%. The present value of $1 for two periods at 13% is 0.783 (use this factor). The patent had a carrying value of $54,400 at January 1, 2017, and the amortization for the year ended December 31, 2017, would have been $10,880. The collection of the note receivable from Pennsylvania is reasonably assured. On July 1, 2017, Bonita sold a parcel of land to Splinter Company for $213,400 under an installment sale contract. Splinter made a $64,020 cash down payment on July 1, 2017, and signed a 4-year 12% note for the $149,380 balance. The equal annual payments of principal and interest on the note will be $42,767 payable on July 1, 2018, through July 1, 2021. The land could have been sold at an established cash price of $213,400. The cost of the land to Bonita was $163,400. Circumstances are such that the collection of the installments on the note is reasonably assured. (a) Your answer is correct. Prepare the long-term receivables section of Bonita's balance sheet at December 31, 2017. (Round answers to 0 decimal places, e.g. 5,125.) BONITA INC. Long-Term Receivables Section of Balance Sheet December 31, 2017 Note receivable from sale of division 700,000 Note receivable from officer 423,000 Note receivable from sale of patent 116,871 Installment contract receivable 124,539 T Total long-term receivables 1,364,409 (b) Prepare a schedule showing the current portion of the long-term receivables and accrued interest receivable that would appear in Bonita's balance sheet at December 31, 2017. (Round answers to 0 decimal places, e.g. 5,129.) BONITA INC. Selected Balance Sheet Balances