On January 1 of Year 1, Stealth Company sold a machine (classified as inventory) that had a list price of $18,000 The customer paid $3,000 cash and signed a three-year, $15,000 note that specified a stated rate of 3%. Annual interest on the full amount of the principal is payable each December 31. The principal is payable on December 31, three years later. The market rate for a note of this risk is 10% Required a. Compute the present value of this note. b. Prepare an effective interest schedule for this note c. Prepare entries required by Stealth for this note on January 1 of Year 1, and December 31 of Year 1, Year 2, and Year 3 Note: Round answers to the nearest whole dollar. a. Present value of notes 12.389

On January 1 of Year 1, Stealth Company sold a machine (classified as inventory) that had a list price of $18,000 The customer paid $3,000 cash and signed a three-year, $15,000 note that specified a stated rate of 3%. Annual interest on the full amount of the principal is payable each December 31. The principal is payable on December 31, three years later. The market rate for a note of this risk is 10% Required a. Compute the present value of this note. b. Prepare an effective interest schedule for this note c. Prepare entries required by Stealth for this note on January 1 of Year 1, and December 31 of Year 1, Year 2, and Year 3 Note: Round answers to the nearest whole dollar. a. Present value of notes 12.389

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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