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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 $187,825 to Joe Kiger. A zero-interest-bearing note (face amount, $250,000) 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 10%. The present value of $250,000 at 10% for three years is $187,825. What amount of interest income should Ms. Price recognize in 2017?

A) $18,783.

B) $25,000.

C) $75,000.

D) $56,350.

Reference no: EM132477349

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