On December 31, 2018, COVID Company finished consultation services and accepted in exchange a promissory note with a face value of €450,000, a due date of December 31, 2021, and a stated rate of 5%, with interest receivable at the end of each year. The fair value of the services is not readily determinable and the note is not readily marketable. Under the circumstances, the note is considered to have an .appropriate imputed rate of interest of 10% Required: (Show your Working. You have the option to upload your answer/working for this question via (the provided link/ button Prepare the entries that would be recorded by COVID company for the sale and for the receipt and interest :on the following dates A) 31 December 2018 B) 31 December 2019 C) 31 December 2020 D) 31 December 2021
On December 31, 2018, COVID Company finished consultation services and accepted in exchange a promissory note with a face value of €450,000, a due date of December 31, 2021, and a stated rate of 5%, with interest receivable at the end of each year. The fair value of the services is not readily determinable and the note is not readily marketable. Under the circumstances, the note is considered to have an .appropriate imputed rate of interest of 10% Required: (Show your Working. You have the option to upload your answer/working for this question via (the provided link/ button Prepare the entries that would be recorded by COVID company for the sale and for the receipt and interest :on the following dates A) 31 December 2018 B) 31 December 2019 C) 31 December 2020 D) 31 December 2021
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On December 31, 2018, COVID Company finished
consultation services and accepted in exchange a
promissory note with a face value of €450,000, a due
date of December 31, 2021, and a stated rate of 5%,
with interest receivable at the end of each year. The
fair value of the services is not readily determinable
and the note is not readily marketable. Under the
circumstances, the note is considered to have an
.appropriate imputed rate of interest of 10%
Required: (Show your Working. You have the option
to upload your answer/working for this question via
(the provided link/ button
Prepare the entries that would be recorded by COVID
company for the sale and for the receipt and interest
:on the following dates
A) 31 December 2018
B)
31 December 2019
C) 31 December 2020
D) 31 December 2021
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