ABC Company recently loaned $30,000 to WJAX, a local radio station. WJAX signed a non-interest-bearing note requiring the $30,000 to be repaid in three years. As part of the agreement, WJAX will provide ABC Co with a specific amount of free radio advertising over the three-year note term. Draft a proposal to your supervisor, the ABC Company Controller, on how ABC Co should determine the value of the note receivable and the accounting treatment of the "free" advertising.

Answer rating: 100% (QA)

Value of the notes receivable Face value of the Notes Plus Interest Revenue which i... View the full answer