Cypress Oil Company's December 31, 2021, balance sheet listed $1,210,000 of notes receivable and $26,200 of interest rec
Posted: Wed Mar 09, 2022 8:22 am
Cypress Oil Company's December 31, 2021, balance sheet listed
$1,210,000 of notes receivable and $26,200 of interest receivable
included in current assets. The following notes make up the notes
receivable balance:
The company records adjusting entries only at year-end. There were
no other notes receivable outstanding during 2021.
Required:
1. Determine the rate used to discount the
noninterest-bearing note.
2. Determine the explicit interest rate on
Note 2. (Round your intermediate calculations to the
nearest whole dollar amount.)
3. What is the amount of interest revenue
that appears in the company’s 2021 income statement related to
these notes?
$1,210,000 of notes receivable and $26,200 of interest receivable
included in current assets. The following notes make up the notes
receivable balance:
The company records adjusting entries only at year-end. There were
no other notes receivable outstanding during 2021.
Required:
1. Determine the rate used to discount the
noninterest-bearing note.
2. Determine the explicit interest rate on
Note 2. (Round your intermediate calculations to the
nearest whole dollar amount.)
3. What is the amount of interest revenue
that appears in the company’s 2021 income statement related to
these notes?