MC090 (Points: 5) On January 1, 2007, Lex Co. sold goods to Eaton Company. Eaton signed a noninterest-bearing note requiring payment of $80,000...

On January 1, 2007, Lex Co. sold goods to Eaton Company. Eaton signed a noninterest-bearing note requiring payment of $80,000 annually for seven years. The first payment was made on January 1, 2007. The prevailing rate of interest for this type of note at date of issuance was 10%. Information on present value factors is as follows: Present Value Present Value of Ordinary Period of 1 at 10% Annuity of 1 at 10% 6 .5645 4.3553 7 .5132 4.8684 Lex should record sales revenue in January 2007 of a. $428,419. b. $389,472. c. $348,424. d. $285,600.