zero-interest-bearing note
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
On January 1, 2012, Ball Co. exchanged equipment for a $200,000 zero-interest-bearing note due on January 1, 2015. The prevailing rate of interest for a note of this type at January 1, 2012 was 10%. The present value of $1 at 10% for three periods is 0.75. What amount of interest revenue should be included in Bell's 2013 income statement?
Group of answer choices
$0
$15,000
$16,500
$20,000
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