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QUESTION
On January 1, 2010, West Co. exchanged equipment for a $400,000 zero-interest-bearing note due on January 1, 2013. The prevailing rate of interest...
On January 1, 2010, West Co. exchanged equipment for a $400,000 zero-interest-bearing note due on January 1, 2013. The prevailing rate of interest for a note of this type at January 1, 2010 was 10%. The present value of $1 at 10% for three periods is 0.75. What amount of interest revenue should be included in West's 2011 income statement?
