The Field Detergent Company sold merchandise to a customer on June 30, 2024. Payment was made in
Question:
The Field Detergent Company sold merchandise to a customer on June 30, 2024. Payment was made in the form of a noninterest-bearing note requiring the customer to pay $85,000 on June 30, 2026. Assume that a 10% interest rate properly reflects the time value of money in this situation.
Required:
Calculate the amount at which Field should record the note receivable and corresponding sales revenue on June 30, 2024.
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The time value of money (TVM) is the concept that the money you have in your pocket today is worth more than the same amount would be if you received it in the future because of the profit it can earn during the interim.
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