27On January 1, Year 1, Company A issued a non-interest-bearing note with a $40,000 face value to Company B in exchange for $40,000 in cash. The note is due in five years, and Company A has agreed togive Company B price discounts during the five-year period. The present value of the note at the implied rate of 5% is $31,341.How much Unearned Sales Revenue is recorded with the issuance of the note?$2,000$8,659$31,341$40,000

Given:Face Value of the Note = 40,000Present Value of the Note = 31,341 Unearned Sales Revenue =…

Answered: 27 On January 1, Year 1, Company A…

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter14: Long-term Liabilities: Bonds And Notes

Section: Chapter Questions

Problem 11E

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