11. An entity received a seven year zero interest bearing note on February 1, 2019 in exchange for a property sold. There was no established exchange price for property and the note has no ready market. The prevailing rate of interest for a note of this type was 7% on February 1, 2019, 6% on December 31, 2019, 8% on February 1, 2020 and 9% on December 31, 2020. What interest rate should be used to calculate the interest revenue from the transaction for the years ended December 31, 2019 and 2020, respectively? a. 0% and 0% b. 7% and 7% c. 7% and 9% d. 6% and 9%

11. An entity received a seven year zero interest bearing note on February 1, 2019 in exchange for a property sold. There was no established exchange price for property and the note has no ready market. The prevailing rate of interest for a note of this type was 7% on February 1, 2019, 6% on December 31, 2019, 8% on February 1, 2020 and 9% on December 31, 2020. What interest rate should be used to calculate the interest revenue from the transaction for the years ended December 31, 2019 and 2020, respectively? a. 0% and 0% b. 7% and 7% c. 7% and 9% d. 6% and 9%

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter6: Cash And Receivables

Section: Chapter Questions

Problem 17E: Interest-Bearing and Non-Interest-Bearing Notes On December 11, 2019, Hooper Inc. made a credit sale...

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