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Find the amount of interest income

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Question - On January 1, 2021, Boggan sold property to Roberts which originally cost Boggan $3,000,000. The property had a net book value of $1,850,000 on December 31, 2020. There was no established exchange price for this property. In exchange for the property, Roberts gave Boggan a $4,500,000 zero-interest-bearing note, payable in three equal annual installments of $1,500,000, with the first payment due on December 31, 2021. The prevailing rate of interest for a note of this type is 7%. Find the amount of interest income that should be recognized by Boggan in 2022, using the effective-interest method?

Reference no: EM132846522

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