Cambria Limited took a $250,000 two-year note receviable from a customer in connection with a major...

Cambria Limited took a $250,000 two-year note receviable from a customer in connection with a major inventory sale transaction on 1 January 20X5. The note required annual end-of-year interest payments of 4%, and the principal was due at the end of 20X6.

Requirement 1: Assume now that the market interest rate is 8%, Calculate the present value of the note, and prepare a schedule that shows the annual interest. (Round time value factor to 5 decimal places and final answers to the nearest whole dollar amount. Enter all answers in positive.)

Present Value = __________

Opening Net Liability/Receivable = ___________

Interest Paid/Received = __________

Discount Amortization = ___________

Closing Net Liability/Receivable = _____________

Prepare journal entries to record the initial sale transaction and each payment on the books of Cambria, consistent with requirement 1. Use the gross method to record the note.

Expert Solution

ekkarill92 answered 1 year ago

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