Crane Company receives a $64,000, 7-year note bearing interest of 12% (paid annually) from a customer...

Crane Company receives a $64,000, 7-year note bearing interest of 12% (paid annually) from a customer at a time when the discount rate is 8%.

Expert Solution

	$		PVF
Present Value of note after 7 year	37,343		n	@ 8%	Cumulative
(64000 x .5835)			1	0.9259
			2	0.8573
Present value of Interest over 7 year	39,985		3	0.7938
(64000 x 12% x 5.2064)			4	0.7350
			5	0.6806
Total Present Value	77,329		6	0.6302
			7	0.5835	5.2064
So, if company receives $ 64,000 note having present value of $ 77,329


Journal entry at accepting note	$	$
12% Note Receivable	77,329
Accounts Receivable		64,000
Interest Income		13,329


Let me know if any query

ekkarill92 answered 1 year ago

Oriole Company receives a $78,000, 10-year note bearing interest of 9% (paid annually) from a customer...

Oriole Company receives a $78,000, 10-year note bearing interest of 9% (paid annually) from a customer at a time when the discount rate is 11%. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) What is the present value of the note received by Oriole? (Round answer to 2 decimal places, e.g. 25.25.) Present value of note received = ??

On October 1, Black Company receives a 10% interest-bearing note from Reese Company to settle a...

On October 1, Black Company receives a 10% interest-bearing note from Reese Company to settle a $22,600 account receivable. The note is due in six months. At December 31, Black should record interest revenue of a.$572 b.$565 c.$575 d.$562 Please answer it asap

On Jan. first, 2018, Snuff Company accepts 60000 non-interest bearing note from a customer for the...

On Jan. first, 2018, Snuff Company accepts 60000 non-interest bearing note from a customer for the sale of goods. The note is to be paid in 3 equal installments every Dec. 31st (first payment on Dec. 31, 2018). An assumed interest rate of 10% is implied. Round installment payments to the nearest dollar. pt 1: Determine the PV of the note. Show all computations or calculator imputs. pt 2: Prepare an amortization table in Excell to show the revenue recognized...

On January 1, 2018 Kimmel Company accepts a $53000 non interest bearing note from a customer...

On January 1, 2018 Kimmel Company accepts a $53000 non interest bearing note from a customer for services provided. The note is to be paid in 4 equal installments every 6 months (payments every July 1 and January 1 with the first payment on July 1, 2018) An assumed interest rate of 9% is implied. Round installments to the nearest dollar. A) Prepare an amortization table for this note. Round amounts to the nearest dollar. Clearly label your rows with...

How is Interest-Bearing Note different from Non-Interest Bearing Note? How are the journal entries different for...

How is Interest-Bearing Note different from Non-Interest Bearing Note? How are the journal entries different for each of them? Provide examples of each joirnal entry.

On January 2, SHB Company receives a 3-year, $10,000, noninterest bearing note, the present value of...

On January 2, SHB Company receives a 3-year, $10,000, noninterest bearing note, the present value of which is $7,722. The rate implicit on this transaction is 9%. You are completing SHB's note receivable account. To prepare each required journal entry: Enter the corresponding debit or credit amount in the associated column. Round all amounts to the nearest whole number. Not all rows in the table might be needed to complete each journal entry. If no journal entry is needed, check...

Company A received a five year $25,000 note bearing interest of 3%. The market rate of...

Company A received a five year $25,000 note bearing interest of 3%. The market rate of the note is 2.5%. What amount of interest revenue will the company record at the end of the first year

A 5.4% coupon bearing bond pays interest semi-annually and has a maturity of 12 years. If...

A 5.4% coupon bearing bond pays interest semi-annually and has a maturity of 12 years. If the current price of the bond is $1,076.63, what is the yield to maturity of this bond? (Answer to the nearest hundredth of a percent, e.g. 12.34%)

#207 Sam Company had an interest-bearing note receivable in the face amount of $7,800. This note...

#207 Sam Company had an interest-bearing note receivable in the face amount of $7,800. This note was created on March 1, Year 1, as the result of a $7,800 sales transaction by Sam. The note's interest rate and due date were 7% and February 1, Year 2, respectively. The principal and all of the interest are to be collected in full on the note's due date. On September 1, Year 1, Sam found itself in need of cash and opted...

On July 9, Mifflin Company receives a $7,400, 90-day, 10% note from customer Payton Summers as...

On July 9, Mifflin Company receives a $7,400, 90-day, 10% note from customer Payton Summers as payment on account. Compute the amount due at maturity for the note and interest. (Use 360 days a year.) $7,400 $7,523 $7,065 $7,585 $7,540

Question