n July 1, 2022, an auditing firm obtained a three-year 10% note receivable for auditing services rendered. At that time, the market rate of interest was 12%. The face amount of the note is due on the maturity date while the interest is due every June 30 starting June 30, 2023.The formula to compute for the amount of interest income on December 31, 2022 is 2 points Face amount x 5% Face amount x 6%
n July 1, 2022, an auditing firm obtained a three-year 10% note receivable for auditing services rendered. At that time, the market rate of interest was 12%. The face amount of the note is due on the maturity date while the interest is due every June 30 starting June 30, 2023.The formula to compute for the amount of interest income on December 31, 2022 is 2 points Face amount x 5% Face amount x 6%
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 22MC: A company collects an honored note with a maturity date of 24 months from establishment, a 10%...
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On July 1, 2022, an auditing firm obtained a three-year 10% note receivable for auditing services rendered. At that time, the market rate of interest was 12%. The face amount of the note is due on the maturity date while the interest is due every June 30 starting June 30, 2023.The formula to compute for the amount of interest income on December 31, 2022 is
2 points
Face amount x 5%
Face amount x 6%
Present value of note on July 1, 2022 x 5%
Present value of note on July 1, 2022 x 6%
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