On January 1, 2022, Balance Bar Co. receives a 5-year, $100,000 zero-interest-bearing note for services they provided. The market rate of interest for a note of similar risk is 6 percent. a. How does Balance Bar record the receipt of the note? b. And how does Balance Bar record interest revenue at the end of the first year? c. At the end of the second year?
On January 1, 2022, Balance Bar Co. receives a 5-year, $100,000 zero-interest-bearing note for services they provided. The market rate of interest for a note of similar risk is 6 percent. a. How does Balance Bar record the receipt of the note? b. And how does Balance Bar record interest revenue at the end of the first year? c. At the end of the second year?
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 24Q: Chemical Enterprises issues a note in the amount of $156,000 to a customer on January 1, 2018. Terms...
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2. On January 1, 2022, Balance Bar Co. receives a 5-year, $100,000 zero-interest-bearing note for services they provided. The market rate of interest for a note of similar risk is 6 percent.
a. How does Balance Bar record the receipt of the note?
b. And how does Balance Bar record interest revenue at the end of the first year?
c. At the end of the second year?
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