Question: Farrison Company has an 8% note receivable dated June 30, 2016, in the original amount of 1,500,000. Payments of 500,000 in principal plus accrued interest

Farrison Company has an 8% note receivable dated June 30, 2016, in the original amount of 1,500,000. Payments of 500,000 in principal plus accrued interest are due annually on July 1,2017, 2018 and 2019.

On June 30,2018, what amount should be reported as a current asset for accrued interest on note receivable? please show solution. thank you.

a. 120,000

b. 80,000

c. 40,000

d. 0

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