On December 31, 2009, Jet Co. received a $10,000 note receivable from Maxx, Inc. in exchange for services rendered.

Interest is calculated on the outstanding balance at the interest rate of 3% compounded annually and payable at maturity. The note from Maxx, Inc. is due in five years.

The market interest rate for similar notes on December 31, 2009, was 8%. The compound interest factors are as follows:

Future value of $1 due in nine months at 3% 1.0225 Future value of $1 due in five years at 3% 1.1593 Present value of $1 due in nine months at 8% .944 Present value of $1 due in five years at 8% .680 At what amounts should this note receivable be reported in Jet’s December 31, 2009 balance sheet?

a. $6,800

b. $7,820

c. $6,200

d. $7,883