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USE THE FOLLOWING INFORMATION TO ANSWER THE QUESTION: *For all PV calculations, use the tables presented in #1 above. On January 1, 2018, ABC rendered
USE THE FOLLOWING INFORMATION TO ANSWER THE QUESTION:
*For all PV calculations, use the tables presented in #1 above.
On January 1, 2018, ABC rendered services to Smith Corporation and accepted a $200,000 note. In exchange, Smith agreed to make (5) annual payments of P&I with the first payment to be made on December 31, 2018. An interest rate of 8% is imputed.
Required: Use the information above to answer the problem
1. Determine the amount of (1) PMT of P&I | $________________________________ |
2. What amount of Service Revenue should ABC recognize on January 1, 2018? | $________________________________ |
3. What amount of Interest Revenue should ABC recognize on this note for the year ending December 31, 2019? | $________________________________ |
4. What is the Carrying Value of the Note Receivable at December 31, 2019? | $________________________________ |
PV of $1 Periods 3 5 9 10 4% 89 .82 70 .68 84 74 .59.56 6% 8% 79.68 .50.46 9% 77 .65 46 42 Present Value of an Ordinary Annuity 4% 2.77 4.45 7.43 8.11 6% 2.67 4.21 6.80 7.36 8% 2.57 3.99 6.25 6.71 9% 2.53 3.89 5.99 6.41
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