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Suppose Comet Company provided consulting services to Mustang Inc. on December 31, 2010, but has decided to allow Mustang to pay the balance due over

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Suppose Comet Company provided consulting services to Mustang Inc. on December 31, 2010, but has decided to allow Mustang to pay the balance due over time. Comet is considering several different note options below. The market rate of interest for a company of Mustang's risk level is 12%. A. For each option, determine the appropriate amount of service revenue that comet would record on December 31, 2010 and the amount of interest revenue comet would record for the full year ended December 31, 2012. Use the Present value tables provided in class, and do not round the factors. Round all answers to the nearest whole dollar (including interest and cash payments for each year in your calculation). If Comet Company opts for option #1 above, what is the total amount of interest revenue it will earn over the life of the note. $ __________________

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