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Business, 19.02.2021 16:10 gwendallinesikes

On January 1, 2020, HD Corp. paid $60,000 and issued a 5-year noninterest bearing note payable with a face value of $120,000 in exchange for a piece of equipment. The applicable interest rate is 8%. HD Corp depreciates over a straight-line basis and utilizes the effective interest method to record interest expense. The equipment is expected to be in service for 8-years at which point it will be worthless. Required:
What is the carrying value of the note payable on 12/31/2021?

a. $120,000
b. $88,204
c. $75.136
d. $95.260
e. $89,335

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On January 1, 2020, HD Corp. paid $60,000 and issued a 5-year noninterest bearing note payable with...
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