BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

Solutions

Chapter
Section
BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
1 views

On January 1, 2019, Park Company accepted a $36,000, non-interest-bearing, 3-year note from a major customer in exchange for used equipment. The equipment had originally cost Park $200,000 and had a book value of $20,000 on the date of the sale. At the 12% imputed interest rate for this type of loan, the present value of the note is $25,500 on January 1, 2019. Park uses the effective interest rate. What is the carrying value of the note receivable on Park’s December 31, 2019, balance sheet?

  1. a. $28,560
  2. b. $29,000
  3. c. $32,500
  4. d. $36,000

To determine

Identify the carrying value of the notes receivable on Company P’s balance sheet.

Explanation

Notes receivable: Notes receivable denotes a long-term asset that describes the amount to be received by the company. The note carries all the details of receivable amounts, principal and interest, and maturity dates.

Identify the carrying value of the notes receivable on Company P’s balance sheet.

Carrying value of the notes receivable=[Present value of the note+(Present value of the note×Interest rate

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

What are the major tasks involved in managing a sales force?

Foundations of Business (MindTap Course List)

STOCK SPLIT After a 5-for-I stock split, Strasburg Company paid a dividend of 0.75 per new share, which represe...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

LO3 Current assets are listed on the balance sheet in order of liquidity.

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

What are the two main causes of market failure? Give an example of each.

Principles of Macroeconomics (MindTap Course List)

What is a separation report?

PAYROLL ACCT.,2019 ED.(LL)-TEXT