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Determine the interest rate that will be earned by adani

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Reference no: EM132685130

On January 2, 2020, Adani Inc. sells goods to Geo Company in exchange for a zero-interest-bearing note with a face value of $11,000, with payment due in 12 months. The fair value of the goods at the date of sale is $10,000 (cost $6,000). Assume that the company chooses to reflect the interest component.

Problem (a) Prepare the journal entries to record this transaction on January 2, 2020.

Problem (b) How much total revenue should be recognized in 2020?

Problem (c) Using Excel or a financial calculator, determine the interest rate that will be earned by Adani.

Reference no: EM132685130

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