3 5 8 10 1 Problem 15 (sale with time value of money, IR-inverted] 2 On January 1, 2020, ABC sold and delivered a product to XYZ. ABC allows XYZ to delay payment for twelve months, at which time XYZ will pay ABC $220,000. ABC deems the financing component of the 4 transaction to be significant and decides that an applicable interest rate is __%. ABC recorded the following entries relating to the sale. 6 7 Note receivable 220,000 Discount on note receivable 20,000 9 Sales revenue 200,000 (entry made on January 1, 2020) 11 Cash 220,000 12 Discount on note receivable 20,000 13 Interest revenue 20,000 14 Note receivable 220,000 15 (entry made to record receipt of XYZ payment on 12/31/2020) 16 17 Required 18 1. What must have been the applicable interest rate? 20 21 Enter your answer below in the green boxes. 22 23 Applicable interest rate (enter as a fraction; e.8., .02 not 2%): 24 19