On January 1, 2022, Cornet Inc. loaned $187,825 to Pact Co. A zero-interest-bearing note (face amount, $250,000) was exchanged solely for cash; no other rights or privileges were exchanged. The note is to be repaid on December 31, 2024. The prevailing rate of interest for a loan of this type is 9%. What amount of interest income should Cornet recognize in 2022? $18,783 $16,904 $25,000 $22,500
On January 1, 2022, Cornet Inc. loaned $187,825 to Pact Co. A zero-interest-bearing note (face amount, $250,000) was exchanged solely for cash; no other rights or privileges were exchanged. The note is to be repaid on December 31, 2024. The prevailing rate of interest for a loan of this type is 9%. What amount of interest income should Cornet recognize in 2022? $18,783 $16,904 $25,000 $22,500
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, 2022, Cornet Inc. loaned $187,825 to Pact Co. A zero-interest-bearing note (face amount, $250,000) was exchanged solely for cash; no other rights or privileges were exchanged. The note is to be repaid on December 31, 2024. The prevailing rate of interest for a loan of this type is 9%. What amount of interest income should Cornet recognize in 2022?
$18,783
$16,904
$25,000
$22,500
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