The Field Detergent Company sold merchandise to the Abel Company on June 30, 2021. Payment was made
Question:
The Field Detergent Company sold merchandise to the Abel Company on June 30, 2021. Payment was made in the form of a noninterest-bearing note requiring Abel to pay $85,000 on June 30, 2023. 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, 2021.
Step by Step Answer:
PV 85000 082645 70248 Noterevenue Present value of 1 n 2 i 10 from Table 2 TABLE 2 Present Value of 1 PV 1 11 nl 10 15 20 30 35 40 45 50 55 60 80 90 100 110 120 200 25 70 1 099010 098522 098039 097561 ...View the full answer
Intermediate Accounting
ISBN: 978-1260481952
10th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
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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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