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For a Note Receivable with a Face Rate of Zero

Question 74

Multiple Choice

For a note receivable with a face rate of zero, an implicit rate of 8%, a term of 3 years, a present value of $14,000 and a face value of $17,636, the interest to record at the end of the first year is equal to


A) $112.
B) zero.
C) $1,120.
D) $1,411.

Correct Answer:

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