What amount of interest revenue should be included in Ty's 2005 income statement?
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On January 1, 2004, Ty exchanged equipment for a $600,000 zero-interest-bearing note due January 1, 2007. The prevailing rate of interest for a note of this type at January 1, 2004 was 10%. (PV of $1 at 10% for 3 periods is 0.75). What amount of interest revenue should be included in Ty's 2005 income statement?
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This solution shows how to calculate the amount of interest revenue to be included in income statement.
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