Cypress Oil Company's December 31, 2024, balance sheet listed $801,000 of notes receivable and $21,000...
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Accounting
Cypress Oil Company's December 31, 2024, balance sheet listed $801,000 of notes receivable and $21,000 of interest receivable included in current assets. The following notes make up the notes receivable balance:
| Note 1 | Dated 8/31/2024, principal of $330,000 and interest at 15% due on 2/28/2025. |
|---|---|
| Note 2 | Dated 6/30/2024, principal of $180,000 and interest due 3/31/2025. |
| Note 3 | $300,000 face value noninterest-bearing note dated 9/30/2024, due 3/31/2025. Note was issued in exchange for merchandise. |
The company records adjusting entries only at year-end. There were no other notes receivable outstanding during 2024.
Required:
- Determine the rate used to discount the noninterest-bearing note.
- Determine the explicit interest rate on Note 2.
- What is the amount of interest revenue that appears in the companys 2024 income statement related to these notes?
Answer is complete but not entirely correct
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