Question

19. On January 1, 2010, West Co. sold equipment for a $400,000 zero-interest-bearing note due
on January 1, 2013. The prevailing rate of interest for a note of this type at January 1, 2010 was
10%. What amount of interest revenue should be included in West's 2011 income statement?
a. $0
b. $30,000
c. $33,000
d. $40,000

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