Business
Business, 31.10.2021 02:50, laylay120

On January 1, 2021, Waterway Industries sold property to Pharoah Company which originally cost Waterway $2850000. There was no established exchange price for this property. Pharoah gave Waterway a $4050000 zero-interest-bearing note payable in three equal annual installments of $1350000 with the first payment due December 31, 2021. The note has no ready market. The prevailing rate of interest for a note of this type is 10%. The present value of a $4050000 note payable in three equal annual installments of $1350000 at a 10% rate of interest is $3357450. What is the amount of interest income that should be recognized by Waterway in 2021, using the effective-interest method

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On January 1, 2021, Waterway Industries sold property to Pharoah Company which originally cost Water...

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