Question 1 On December 31, 2017, Sheffield Corp. sold for $152000 an old machine

Question

Question 1 On December 31, 2017, Sheffield Corp. sold for $152000 an old machine having an original cost of $285000 and a book value of $133000. The terms of the sale were as follows: $19000 down payment $66500 payable on December 31 each of the next two years The agreement of sale made no mention of interest; however, 996 would be a fair rate for this type of transaction. What should be the amount of the notes receivable net of the unamortized discount on December 31, 2017 rounded to the nearest dollar? (The present value of an ordinary annuity of 1 at 9% for 2 years is 1.75911.) $233961 $135980 $116981. $133000. LINK TO TEXT

Explanation / Answer

Notes receivable net of unamortized discount = 66500*1.75911 = $116981 Option 3 is correct

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