Question
Ramsey . accepts a $1,000,000, 8% note on January 1, 2019, in exchange for merchandise. The note is due in 5 years and requires the
Ramsey . accepts a $1,000,000, 8% note on January 1, 2019, in exchange for merchandise. The note is due in 5 years and requires the customer to pay interest quarterly, beginning March 31, 2019. Principal will be received at maturity. The customers normal borrowing rate is 12%.
- Determine the amount of Sales Revenue Ramsey can recognize on Jan 1, 2019:$_____________
Question 2
Using the information in #1 above, determine the carrying value of the Note Receivable at December 31, 2021: $_________________
Question 3
Using the information in #1 above, determine the Total Interest Revenue Ramsey will earn over the entire 5-year lending agreement:
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