Makesaloantomariecoandreceivesinexchangea

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Unformatted text preview: issues related to recognition of notes receivable. Long-Term Note Issued at FACE VALUE Long-Term Note Issued at FACE VALUE Long-Term FACE Long-Term FACE PV of Principal $10,000 x .75132 = $7,513 Principal Chapter 7-43 Factor Present Value LO 6 Explain accounting issues related to recognition of notes receivable. Long-term Note Issued at FACE VALUE Long-term Note Issued at FACE VALUE Long-term FACE Long-term FACE Present value of interest $ 2,487 Present value of principal 7,513 Note current market value Summary $10,000 Dat e Account Tit le J a n. y r . 1 Notes receivable Debit 10,000 Cash De c . y r . 1 Cash 10,000 1,000 Interest revenue Chapter 7-44 Credit 1,000 LO 6 Explain accounting issues related to recognition of notes receivable. Long-Term Note Issued at a DISCOUNT Long-Term Note Issued at a DISCOUNT Long-Term DISCOUNT Long-Term DISCOUNT Illustration: Morgan Corp. makes a loan to Marie Co. and receives in exchange a three­year, $10,000 note bearing interest at 10 percent annually. The market rate of interest for a note of similar risk is 12 percent. How does Morgan record the receipt of the...
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This note was uploaded on 01/29/2013 for the course ACC 223 taught by Professor Staff during the Fall '12 term at Niagara University.

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