Business, 01.03.2021 22:10, darrengresham999

On January 1, 2021, Waterway Industries sold property to Pharoah Company. There was no established exchange price for the property, and Pharoah gave Waterway a $6500000 zero-interest-bearing note payable in 5 equal annual installments of $1300000, with the first payment due December 31, 2021. The prevailing rate of interest for a note of this type is 9%. The present value of the note at 9% was $5056610 at January 1, 2021. What should be the balance of the Discount on Notes Payable account on the books of Pharoah at December 31, 2021 after adjusting entries are made, assuming that the effective-interest method is used

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On January 1, 2021, Waterway Industries sold property to Pharoah Company. There was no established e...