What should be the balance of the Discount on Notes Payable account on the books of ABC Company at December 31, 2021 after adjusting entries are made assuming that the effective interest method is used? On January 1, 2021, ABC Company sold property to EFG Company. There was no established exchange price for the property, and EFG gave ABC a 11,000,000 non-interest bearing note payable in 5 equal annual installments of 400,000, with the first payment due December 31, 2021. The prevailing rate of interest for a note of this type is 10%. The present value of the note at 10% was n758,160 at January 1, 2021. What should be the balance of the Discount on Notes Payable account on the books of ABC Company at December 31, 2021 after adjusting entries are made assuming that the effective interest method is used? a.) 0 b.) 241,840 c.) 166,024 d.) 141,840 e.) none of the above
What should be the balance of the Discount on Notes Payable account on the books of ABC Company at December 31, 2021 after
On January 1, 2021, ABC Company sold property to EFG Company. There was no established exchange price for the property, and EFG gave ABC a 11,000,000 non-interest bearing note payable in 5 equal annual installments of 400,000, with the first payment due December 31, 2021. The prevailing rate of interest for a note of this type is 10%. The present value of the note at 10% was n758,160 at January 1, 2021. What should be the balance of the Discount on Notes Payable account on the books of ABC Company at December 31, 2021 after adjusting entries are made assuming that the effective interest method is used?
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