Chapter 1 Problem 6-23
Face value 900,000 Present value 720,540
Present value (300,000 x 2.4018) 720,540 Cash received 100,000
Unearned interest income 179,460 Sales price 820,540
Cost of generator 700,000
Gross income 120,540
Jan. 1 Cash 100,000
Notes receivable 900,000
Sales 820,540
Unearned interest income 179,460
Dec. 31 Cash 300,000
Notes receivable 300,000
31 Unearned interest income 86,465
Interest income 86,465
Date Collection Interest Principal Present value
Jan. 1, 2008 720,540
Dec. 31, 2008 300,000 86,465 213,535 507,005
Dec. 31, 2009 300,000 60,841 239,159 267,846
Dec. 31, 2010 300,000 32,154 267,846 -
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