On June 1, Parson Assoc. sold equipment to Arleo and agreed to accept a 3-month, $62,000,...
- On June 1, Parson Assoc. sold equipment to Arleo and agreed to accept a 3-month, $62,000, 10% interest-bearing note in payment at a time when the prevailing rate of interest for similar transactions was 10%. When the note was collected upon maturity, Parson would recognize interest revenue of:
Homework Answers
Answer.
Interest Revenue recognized at the time of maturity = Face Value
of Note Interest Rate
Time
= $62,000 0.10
3/12 = $1,550
Thus, Parson would recognize interest revenue of $1,550 at the time maturity of Note. This interest revenue is presented in income statement under the head other income (non operating Income).
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On June 1, Parson Assoc. sold equipment to Arleo and agreed to
accept a 3-month, $62,000,...
22. On June 1, Parson Assoc. sold equipment to Arleo and agreed to accept a 3-month,...
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