Preparing Entries and Interest Schedule for Long-Term Note…
Preparing Entries and Interest Schedule for Long-Term Note Receivable; Effective Interest Method
On January 1 of Year 1, Stealth Company sold a machine (classified as inventory) that had a list price of $18,000. The customer paid $3,000 cash and signed a three-year, $15,000 note that specified a stated rate of 3%. Annual interest on the full amount of the principal is payable each December 31. The principal is payable on December 31, three years later. The market rate for a note of this risk is 10%. Round answers to the nearest whole dollar
Required
a. Compute the present value of this note.
(b and c with the image.)
Excellent Grades Guaranteed! (A+ or B Minimum)