On January 1, 2022, Balance Bar Co. receives a 5-year, $100,000 zero-interest-bearing note for services they provided. The market rate of interest for a note of similar risk is 6 percent. a. How does Balance Bar record the receipt of the note? b. And how does Balance Bar record interest revenue at the end of the first year? c. At the end of the second year?
On January 1, 2022, Balance Bar Co. receives a 5-year, $100,000 zero-interest-bearing note for services they provided. The market rate of interest for a note of similar risk is 6 percent. a. How does Balance Bar record the receipt of the note? b. And how does Balance Bar record interest revenue at the end of the first year? c. At the end of the second year?
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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2. On January 1, 2022, Balance Bar Co. receives a 5-year, $100,000 zero-interest-bearing note for services they provided. The market rate of interest for a note of similar risk is 6 percent.
a. How does Balance Bar record the receipt of the note?
b. And how does Balance Bar record interest revenue at the end of the first year?
c. At the end of the second year?
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