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On January 1,2024, Bonita Company sold property to Carla Vista Company. There was no established...

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Accounting

On January 1,2024, Bonita Company sold property to Carla Vista Company. There was no established exchange price for the
property, and Carla Vista gave Bonita a $5900000 zero-interest-bearing note payable in 5 equal annual installments of $1180000,
with the first payment due December 31,2024. The prevailing rate of interest for a note of this type is 9%. The present value of the
note at 9% was $4589787 at January 1,2024. What should be the balance of the Discount on Notes Payable account on the books
of Carla Vista at December 31,2024 after adjusting entries are made, assuming that the effective-interest method of amortization is
used?
Click here to view factor table.
$0
$897132
$778187
$1310213
image

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