Shady Equipment sells a truck to Fred for $100,000 on January 1, 2016. Payment of $100,000 is received two years later and interest is paid at the end of two years. The truck is delivered two years later. The market rate of interest is 8%.

1. Refer to Shady Equipment. How much sales revenue will Shady report on January 1, 2016?

A) $0.00

B) $100,000

C) $66,640

D) $50,000

2. Refer to Shady Equipment. How much interest expense will Shady report over the term of the contract?

A) $16,640

B) $66,640

C) $50,000

D) $36,640

Please show your calculations.