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Business, 12.05.2020 14:57 julessorondo269

On January 1, 2019, AJ Co. exchanged equipment for a $400,000 zero-interest-bearing note due on January 1, 2022. The prevailing rate of interest for a note of this type at January 1, 2019 was 10%. The present value of $1 at 10% for three periods is 0.75. What amount of interest revenue should be included in AJ;s 2020 income statement? AJ has a 12/31 fiscal year end and uses the effective interest method.

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On January 1, 2019, AJ Co. exchanged equipment for a $400,000 zero-interest-bearing note due on Janu...
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