Below are descriptions of 5 different notes. Each represents a different type of note we discussed in class. Use this information to answer the following questions:

Note 1: ABC will require XYZ to pay a down payment of $8,000 at 12/31/Y1 and the remainder in the form of a $40,000 note, at 6% interest, due 12/31/Y6 Interest will be due semi-annually. The prevailing market rate at the time of issuance is 3%

Note 2: ABC will provide the service for XYZ in exchange for a $40,000 non-interest bearing note, to be paid at the end of 6 years. The prevailing market rate at the time of issuance is 6%.

Note 3 ABC will provide the service for XYZ in exchange for a $30.000 non-interest bearing note, with equal payments made at the end of each of the next 6 years. The first payment will be made 12/31/V2. The prevailing market rate at the time of issuance is 6% 

Note 4: ABC will provide the service for XYZ in exchange for a five year, $30,000, 6% note, with payments made monthly. The first payment will be made at the end of the next month. The prevailing market rate at the time of issuance is 6%.

Note 1: How much service revenue would ABC record at 12/31/Y1? Round your answer to the nearest dollar.

Answer rating: 100% (QA)

To calculate the service revenue ABC would record at 1231Y1 for Note 1 we need to determine the pres... View the full answer