Question

The Field Detergent Company sold merchandise to the Abel Company on June 30, 2021. Payment was made in the form of a noninterest-bearing note requiring Abel to pay $85,000 on June 30, 2023. Assume that a 10% interest rate properly reflects the time value of money in this situation. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: Calculate the amount at which Field should record the note receivable and corresponding sales revenue on June 30, 2021. (Round your final answers to nearest whole dollar amount.)

Answer 1

Answer:

$70,428.25

Explanation:

The computation of the amount at which field should record the note receivable is shown below:

Present value = Future value × PVF (i%, n)

= $85,000 × PVF  (10%,2)

= $85,000 × 0.82645

= $70,428.25

Hence, the amount at which record the note receivable $70,428.25

We simply applied the above formula so that the present value could come