On January 1, 2020, Flounder Furniture Ltd. borrowed $3 million (face value) from Aurora Inc., a major customer, through non–interest-bearing note due in 5 years. Because the note was non–interest-bearing, Flounder Furniture agreed to sell furniture to this customer at lower than market price. A 11% rate of interest is normally charged on this type of loan. Using (1) factor tables, (2) a financial calculator, or (3) Excel function PV, calculate the amount that the note would be recorded at on January 1, 2020. (Hint: Refer to Chapter 3 for tips on calculating.) Please show solution in Excel
On January 1, 2020, Flounder Furniture Ltd. borrowed $3 million (face value) from Aurora Inc., a major customer, through non–interest-bearing note due in 5 years. Because the note was non–interest-bearing, Flounder Furniture agreed to sell furniture to this customer at lower than market price. A 11% rate of interest is normally charged on this type of loan. Using (1) factor tables, (2) a financial calculator, or (3) Excel function PV, calculate the amount that the note would be recorded at on January 1, 2020. (Hint: Refer to Chapter 3 for tips on calculating.) Please show solution in Excel
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
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 10MC: On January 1, 2019, Park Company accepted a 36,000, non-interest-bearing, 3-year note from a major...
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On January 1, 2020, Flounder Furniture Ltd. borrowed $3 million (face value) from Aurora Inc., a major customer, through non–interest-bearing note due in 5 years. Because the note was non–interest-bearing, Flounder Furniture agreed to sell furniture to this customer at lower than market price. A 11% rate of interest is normally charged on this type of loan.
Using (1) factor tables, (2) a financial calculator, or (3) Excel function PV, calculate the amount that the note would be recorded at on January 1, 2020. (Hint: Refer to Chapter 3 for tips on calculating.)
Please show solution in Excel
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