Clancy co. accepted a two-year noninterest-bearing note for $1,166,400 on january 1, 2020. the note was accepted as payment for merchandise with a fair value of $1,000,000. the effective interest rate is 8%.the cash collection on december 31, 2021, would be recorded

Dr Cash 1,166,400

Cr Notes Receivable 1,000,000

Cr Interest Revenue 166,400

Explanation:

To determine the net amount of the notes receivable that will be recorded, we must determine the present value of the note:

present value = 1,166,400 / (1 + 8%)² = 1,166,400 / 1.1664 = 1,000,000

wheres the chart? so i can answer.

the answer is a.

by: nicholas dooley