On January 1, 2017 Pucket Co. issued a $950,000, 4-yr, zero- interest bearing note to Key...

 

 

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On January 1, 2017 Pucket Co. issued a $950,000, 4-yr, zero- interest bearing note to Key Bank. The note was issued to yield 4% annual interest. On 12/31/18, Key Bank concluded that Pucket would probably not be able to repay the entire loan and considered the loan to be impaired. Key Bank estimates that Pucket will pay back only $650,000 of the principal at maturity. (Present Value Factors are below). Present value of 1 (Present value of a single sum) n 1 2 3 4 5 2% .98039 3% 4% .97087 .96154 96117 94260 .92456 .92385 .88949 .85480 5% .90573 .86261 .82193 .95238 94732 .91514 .88900 .86384 .83962 6% .90703 .89000 .82270 .94340 .78353 .79209 74726 On January 1, 2017 Pucket Co. issued a $950,000, 4-yr, zero- interest bearing note to Key Bank. The note was issued to yield 4% annual interest. On 12/31/18, Key Bank concluded that Pucket would probably not be able to repay the entire loan and considered the loan to be impaired. Key Bank estimates that Pucket will pay back only $650,000 of the principal at maturity. (Present Value Factors are below). Present value of 1 (Present value of a single sum) n 1 2 3 4 5 2% .98039 3% 4% .97087 .96154 96117 94260 .92456 .92385 .88949 .85480 5% .90573 .86261 .82193 .95238 94732 .91514 .88900 .86384 .83962 6% .90703 .89000 .82270 .94340 .78353 .79209 74726

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