A dollar today is worth more than a dollar to be received in the future....
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Accounting
A dollar today is worth more than a dollar to be received in the future. The difference between the present value of cash flows and their future value represents the time value of money. Interest is the rent paid for the use of money over time. The Stridewell Wholesale Shoe Company recently sold a large order of shoes to Harmon Sporting Goods. Terms of the sale require Harmon to sign a noninterest-bearing note of $60,500 with payment due in two years. How should Stridewell and Harmon value the note receivable/payable and corresponding sales revenue/inventory? Justify your answer.
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