lai502
Nov 6, 2008, 02:09 PM
Please help me on this question:
Xavier Company has a customer that is just starting up and the customer wants to acquire merchandise but defer payment for several years. The customer wants a 4 year note, with the 10% interest payable at the end of each year. The current year market interest rate is 12%. On 1/1/08, Xavier agrees to accept a 10%, $8000 note receivable (N/R), payable in 4 years, including interest.
a. how much merchandise will Xavier give the customer for this note?
b. how will Xavier record the issuance of the note receivable?
c. prepare the amortization table over the life of the note.
d. how does Xavier record the receipt of the first interest payment on 1/1/09?
Xavier Company has a customer that is just starting up and the customer wants to acquire merchandise but defer payment for several years. The customer wants a 4 year note, with the 10% interest payable at the end of each year. The current year market interest rate is 12%. On 1/1/08, Xavier agrees to accept a 10%, $8000 note receivable (N/R), payable in 4 years, including interest.
a. how much merchandise will Xavier give the customer for this note?
b. how will Xavier record the issuance of the note receivable?
c. prepare the amortization table over the life of the note.
d. how does Xavier record the receipt of the first interest payment on 1/1/09?