What amount of service revenue was recorded

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On January 1, 2017 ABC rendered services in exchange for a $20,000 cash down payment (this down payment is NOT a PVAD; it is simply made to reduce the amount being financed) and a 3 year $115,000, 5% note. Interest is to be remitted each June 30 and Dec 31. Principal will be remitted at maturity. This customer has a credit rating which requires that money be borrowed at 8%.

1. What amount of Service Revenue was recorded on January 1, 2017?

2. What amount of interest revenue should be recognized on this note for the year ending December 31, 2018?

3. What is the Carrying Value of the Note Receivable at December 31, 2018?

4. For Scenario above, determine the Total Interest Revenue ABC will recognize over the entire three-year lending agreement.

Reference no: EM131862973

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