On January 1 Year 1, Apple Co. sold goods to Brown Inc. for $250,000 in exchange for a 5-year, zero-interest-bearing note with a face amount of $402,628. The note had an implicit rate of 10 percent. The goods have an inventory cost on Bear’s books of $125,000. What amount of revenue will be recognized on the Year 1 income statement as a result of this transaction?
On January 1 Year 1, Apple Co. sold goods to Brown Inc. for $250,000 in exchange for a 5-year, zero-interest-bearing note with a face amount of $402,628. The note had an implicit rate of 10 percent. The goods have an inventory cost on Bear’s books of $125,000. What amount of revenue will be recognized on the Year 1 income statement as a result of this transaction?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1 Year 1, Apple Co. sold goods to Brown Inc. for $250,000 in exchange for a 5-year, zero-interest-bearing note with a face amount of $402,628. The note had an implicit rate of 10 percent. The goods have an inventory cost on Bear’s books of $125,000. What amount of revenue will be recognized on the Year 1 income statement as a result of this transaction?
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