Find what amount will jensen recognize as interest income

Assignment Help Financial Accounting

Reference no: EM132877490

On January 2, 20X1, Jensen Corporation sells equipment it manufactured to Lewisburg Fabricators in exchange for an $80,000 note due in five years. The note bears no stated interest rate, but requires the entire $80,000 to be repaid at the end of five years. Jensen recently sold the same equipment to another company for $54,447. When Lewisburg Fabricators sought bank financing for this purchase the company was offered the funds at 8%, but decided to let Jensen hold the note.

Problem 1: What amount will Jensen recognize as interest income during 20X1?

Multiple Choice

Option 1: $4,356
Option 1: $4,704
Option 1: $5,111
Option 1: $0

Reference no: EM132877490

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