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What interest rate be used to calculate interest revenue

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Question - Tamarisk Company received a seven-year zero-interest-bearing note on February 22, 2013, in exchange for property it sold to Martinez Company. There was no established exchange price for this property and the note has no ready market. The prevailing rate of interest for a note of this type was 5.8% on February 22, 2013, 6.3% on December 31, 2020, 6.5% on February 22, 2014, and 6.8% on December 31, 2014. What interest rate should be used to calculate the interest revenue from this transaction for the years ended December 31, 2013 and 2014, respectively?

a. 0% and 0%

b. 5.8% and 7.5%

c. 6.3% and 6.8%

d. 5.8% and 5.8%

Reference no: EM132565713

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