On December $30,2022,$ AGH, Inc. purchased a machine from Grant Corp. in exchange for a zero$-$interest$-$bearing note requiring eight payments of $75,000.$ The first payment was made on December $30,2022,$ and the others are due annually on December $30.$ At date of issuance, the prevailing rate of interest for this type of note was $11\%.$ Present value factors are as follows:

Present Value of Ordinary

Period ${?}_{(})$

Annuity of $1$ at $11\%$

$4\mathrm{.}712,5\mathrm{.}231$

$7$

$5\mathrm{.}146,5\mathrm{.}712$

Present Value of

Annuity Due of $1$ at $11\%$

On AGH's December $31,2022$ statement of financial position, the net note payable to Grant is a $353,400.$

b$.385,950.$

c$.392,662.$

d$.428,400.$

Ans: a

LO: $4$

Bloom: K

Difficulty: Medium

Min: $2-4$

AACSB: Analytic

AICPA BB: Strategic$/$Critical Thinking

AICPA FN: Measurement

AICPA PC: Problem Solving and Decision$-$making

IMA: None

$=353,400$

$128.$

On January $1,2022,$ Ott Co$.$ sold goods to Flynn Company. Flynn signe a zero$-$interestbearing note requiring payment of $100,000$ annually for seven years. The first payment was made on January $1,2022.$ The prevailing rate of interest for this type of note at date of issuance was $10\%.$ Information on present value factors is as follows:

Present Value Present Value of Ordinary

Period ${?}_{(})$

$\backslash$table$[[$of $1$ at $10\%,],[0\mathrm{.}5645,4\mathrm{.}3553],[0\mathrm{.}5132,4\mathrm{.}8684]]$

Annuity of $1$ at $10$

$1000004\mathrm{.}86841\mathrm{.}1$

$7$

$0\mathrm{.}5132$

Ott should record sales revenue in January $2022$ of $9.535,524.$

b$.486,840.=535,44$

AD

c$.435,530.$

d$.357,000.$

Ans: a

$2$ LO: $4$