(Solution) - On December 31 2009 TERVO Company accepted Rudolph Company 20 -(2025 Original AI-Free Solution)

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Academic Level: Undergrad. (yrs 3-4)

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On December 31, 2009, TERVO Company accepted Rudolph Company $20,000, 3-year note, paying 6 percent annually on December 31, as full payment for a specialty piece of equipment. The market rate of interest for similar notes is 10 percent. The following data is provided:

Instructions (a) (1) Determine the present value of the note. (Show calculations) and (2) make the appropriate journal entry for TERVO Company on December 31, 2009. Round answers to the nearest dollar (b) Make the appropriate journal entry for TERVO Company on December 31, 2010. Round answers to the nearest dollar (show calculation)
(c) Make the appropriate journal entry for TERVO Company on December 31, 2011. Round answers to the nearest dollar (show calculation)
(d) Make the appropriate journal entry for TERVO Company on December 31, 2012. Assuming the note (and interest) is paid in full on that date (show calculations)