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What amount of interest income should Ms Price recognize

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Question - On January 1, 2020, Ann Price loaned $175488 to Joe Kiger. A zero-interest-bearing note (face amount, $240000) was exchanged solely for cash; no other rights or privileges were exchanged. The note is to be repaid on December 31, 2022. The prevailing rate of interest for a loan of this type is 11%. The present value of $240000 at 11% for three years is $175488. What amount of interest income should Ms. Price recognize in 2020?

a. $26400.

b. $60550.

c. $19304.

d. $79200.

Reference no: EM132643556

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