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What amount of interest income should Ms Price recognize

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Question - On January 1, 2017, Ann Price loaned $209981 to Joe Kiger. A zero-interest-bearing note (face amount, $295000) was exchanged solely for cash; no other rights or privileges were exchanged. The note is to be repaid on December 31, 2019. The prevailing rate of interest for a loan of this type is 12%. The present value of $295000 at 12% for three years is $209981. What amount of interest income should Ms. Price recognize in 2017?

$35400.

$106200.

$25198.

$87550.

Reference no: EM132251873

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