On January 1, 2021, Mumbleford & Sons Co. sold equipment to Mulligan Care Service in exchange for a zero-interest bearing note. The note has a face value of $110,000, with payment due in 12 months. The imputed interest rate is 10%. The fair value of the equipment on the date of sale was $100,000. The amount of revenue to be recognized on this transaction in 2021 is Select one: a. $110,000 sales revenue. b. $100,000 sales revenue. c. $100,000 sales revenue and $10,000 deferred revenue. d. $100,000 sales revenue and $10,000 interest revenue.
On January 1, 2021, Mumbleford & Sons Co. sold equipment to Mulligan Care Service in exchange for a zero-interest bearing note. The note has a face value of $110,000, with payment due in 12 months. The imputed interest rate is 10%. The fair value of the equipment on the date of sale was $100,000. The amount of revenue to be recognized on this transaction in 2021 is Select one: a. $110,000 sales revenue. b. $100,000 sales revenue. c. $100,000 sales revenue and $10,000 deferred revenue. d. $100,000 sales revenue and $10,000 interest revenue.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 14RE: On January 1, 2019, Boater Company issues a 20,000 non-interest-bearing, 5-year note for equipment....
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On January 1, 2021, Mumbleford & Sons Co. sold equipment to Mulligan Care Service in exchange for a zero-interest bearing note. The note has a face value of $110,000, with payment due in 12 months. The imputed interest rate is 10%. The fair value of the equipment on the date of sale was $100,000. The amount of revenue to be recognized on this transaction in 2021 is
Select one:
a. $110,000 sales revenue.
b. $100,000 sales revenue.
c. $100,000 sales revenue and $10,000 deferred revenue.
d. $100,000 sales revenue and $10,000 interest revenue.
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