This question has been answered by Expert on Nov 20, 2011. View Solution
posted a question
7. On January 1, 2012, Ann Price loaned $90,156 to Joe Kiger. A zero-interest-bearing note (face amount, $120,000) was exchanged solely for cash; no other rights or privileges were exchanged. The note is to be repaid on December 31, 2014. The prevailing rate of interest for a loan of this type is 10%. The present value of $120,000 at 10% for three years is $90,156. What amount of interest income should Ms. Price recognize in 2012?
A) $27,048.
B) $36,000.
C) $12,000.
D) $9,016.
Expert answered the question
Dear Student

Please find...  View Full Answer

Download Preview:

Assignment Code: 7675179
7. On January 1, 2012, Ann Price loaned $90,156 to Joe Kiger. A zero-interest-bearing
note (face amount, $120,000) was exchanged solely...