On January 1, 2008, Lex Co. sold goods to Eaton Company. Eaton signed a noninterest-bearing note requiring payment of $80,000 annually for seven years. The first payment was made on January 1, 2008. The prevailing rate of interest for this type of note at date of issuance was 10%. Information on present value factors is as follows:
Lex should record sales revenue in January 2008 of

Question

On January 1, 2008, Lex Co. sold goods to Eaton Company. Eaton signed a noninterest-bearing note requiring payment of $80,000 annually for seven years. The first payment was made on January 1, 2008. The prevailing rate of interest for this type of note at date of issuance was 10%. Information on present value factors is as follows:
 Lex should record sales revenue in January 2008 of

Quizplus · Accepted Answer

$80,000 × (4.8684 × 1.1) = $428,419