Determine the amount of cash sage received

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Problem - On December 31, 2020, Sage Company signed a $1,038,100 note to Pronghorn Bank. The market interest rate at that time was 1 1%. The stated interest rate on the note was 9%, payable annually. The note matures in 5 years. Unfortunately, because of lower sales, Sage's financial situation worsened. On December 31, 2022, Pronghorn Bank determined that it was probable that the company would pay back only $622,860 of the principal at maturity. However, it was considered likely that interest would continue to be paid, based on the $1,038,100 loan. Determine the amount of cash Sage received from the loan on December 31, 2020.

Reference no: EM132950189

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