Question 4: Suppose Hammer Consulting Co. provided consulting services to Duder Inc. on December 31, 2015, but has decided to allow Duder to pay the balance due over time. Hammer Consulting is considering several different note options below. The market rate of interest for a company of Duders risk level is 10%.

A. For each option, determine the appropriate amount of service revenue that Hammer would record on December 31, 2015 and the amount of interest revenue Hammer would record for the full year ended December 31, 2017. Round all answers to the nearest whole dollar (including interest and cash payments for each year in your calculation).

	Service Revenue at 12/31/2015	Interest Revenue for the year ended 12/31/2017
Option 1: Hammer Consulting Co. will require Duder to make a down payment of $30,000 on 12/31/2015 and the remainder in the form of a $90,000, 6% note due in 6 years. Interest payments will be due semi annually.
Option 2: Hammer Consulting Co. will provide the consulting services in exchange for a 4year, $150,000 noninterest bearing note. Interest is compounded quarterly.