Calculate the present value of this loan

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Reference no: EM133435005

Case Study: On January 1, 2023, Vincent Corp. makes a loan to Nisha Company and receives a $150,000, five-year note bearing interest at 4% semi-annually. The market rate for similar loans (with similar credit risk) is 6%.

Instructions

a) Calculate the present value (fair value) of this loan (round to the nearest dollar).

b) Prepare the journal entry to record this transaction.

Reference no: EM133435005

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