The note was accepted as payment for merchandise

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Reference no: EM131023378

1. Chen Inc. accepted a two-year noninterest-bearing note for $605,000 on January 1, 2016. The note was accepted as payment for merchandise with a fair value of $500,000. The effective interest rate is 10%. The entry to record interest on December 31, 2016 would be:

Reference no: EM131023378

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