On January 1, 2020, Sunland Company, a calendar-year company, issued $897000 of notes payable, of whic January 1 for each of the next four years. Ignoring interest, the proper balance sheet presentation on Decer O urrent Liabilities, $448500; Long-term Debt, $448500. O Long-term Debt, $897000. O urrent Liabilities, $224250; Long-term Debt, $672750.

On January 1, 2020, Sunland Company, a calendar-year company, issued $897000 of notes payable, of whic January 1 for each of the next four years. Ignoring interest, the proper balance sheet presentation on Decer O urrent Liabilities, $448500; Long-term Debt, $448500. O Long-term Debt, $897000. O urrent Liabilities, $224250; Long-term Debt, $672750.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Cypress Oil Company's December 31, 2024, balance sheet listed $645,000 of notes receivable and $16,000 of interest receivable included in current assets. The following notes make up the notes receivable balance: Note 1 Dated 8/31/2024, principal of $300,000 and interest at 10% due on 2/28/2025. Note 2 Dated 6/30/2024, principal of $150,000 and interest due 3/31/2025. Note 3 $200,000 face value noninterest-bearing note dated 9/30/2024, due 3/31/2025. Note was issued in exchange for merchandise. The company records adjusting entries only at year-end. There were no other notes receivable outstanding during 2024. Required: 1. Determine the rate used to discount the noninterest-bearing note. 2. Determine the explicit interest rate on Note 2. 3. What is the amount of interest revenue that appears in the company's 2024 income statement related to these notes? 1. Discount rate 2. Interest rate 3. Interest revenue % %
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