Problem 1

Notes Receivable. Use the following present value tables to help answer the following question.

*Do not round any answer until your final answer. Round your final answer to the nearest whole dollar. When entering your final answer, do not use commas or $ sign. (Sorry...Blackboard is very sensitive and will mark your answer incorrect due to rounding and punctuation.)

PV of $1	Periods	3	5	9	10
	4%	.89	.82	.70	.68
	6%	.84	.74	.59	.56
	8%	.79	.68	.50	.46
	9%	.77	.65	.46	.42
Present Value of an Ordinary Annuity
	4%	2.77	4.45	7.43	8.11
	6%	2.67	4.21	6.80	7.36
	8%	2.57	3.99	6.25	6.71
	9%	2.53	3.89	5.99	6.41

Part I. On April 1, 2018, ABC Company rendered services to Jones Company in exchange for a three year, $400,000, 8% note. Payments of P&I (Principal & Interest) are due each April 1st, with the first payment due immediately. December 31st is the fiscal year end for ABC. Jones' normal cost to borrow is 8%.

Required: Use the above information to answer the problem:

1. Determine the dollar amount of the cash payment of P&I to be remitted each April 1st:	$__________________________________________
2. Determine the Service Revenue ABC can recognize on April 1, 2018.	$__________________________________________
3. Determine the Total Interest Revenue that ABC will recognize on this note for the year ended December 31, 2019.	$_____________________________________
4. Prepare a partial Balance Sheet for this Note Receivable as of December 31, 2018:	Current Assets: Interest Receivable $_____________________ Note Receivable $_____________________ Long-Term Investments: Note Receivable $_____________________