On January 1, 2018, London Inc. sold $50,000 worth of goods to Sarnia Ltd.   It was determined that
Sarnia Inc. had poor credit and signed a three year, zero-interest bearing note.   London can borrow
money at an interest rate of 1.5%
Assume both companies follow IFRS (the effective-interest method of amortization).
Requirements
A) Calculate the present value of the note receivable. Show your work for part marks.
B) Prepare the following entries for London Inc.:
1-      Provide the journal entry required on January 1, 2018.
Date	Description	Dr	Cr
2-      Provide the journal entry required on December 31, 2018.
Date	Description	Dr	Cr
3-      Provide the journal entry required on December 31, 2019.
Date	Description	Dr	Cr
4-      Provide the journal entry required on December 31, 2020.
Date	Description	Dr	Cr

Answer rating: 100% (QA)

A To calculate the present value of the note receivable we need to discount the future cash flows us... View the full answer