Question: On January 1 , 2 0 2 4 , the Apex Company exchanged some shares of common stock it had been holding as an investment

On January

1, 2024,

the Apex Company exchanged some shares of common stock it had been holding as an investment for a note receivable. The note principal plus interest is due on January

1, 2025 .

The

2024

income statement reported $

4, 140

in interest revenue from this note and a $

7, 500

gain on sale of investment in stock. The stock's book value was $

27, 000 .

The company's fiscal year ends on December

31 .

Required:

What is the note's effective interest rate?

Reconstruct the journal entries to record the sale of the stock on January

1, 2024,

and the adjusting entry to record interest revenue at the end of

2024 .

The company records adjusting entries only at year

-

end.

On January 1,2024, the Apex Company exchanged some shares of common

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