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How much is the carrying amount of receivable on december

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Reference no: EM133010699

On January 1, 20x1, Karen Co. sold transportation equipment with a historical cost of ?12,000,000 and accumulated depreciation of ?7,000,000 in exchange for cash of ?100,000 and a noninterest-bearing note receivable of ?4,000,000 due in 4 equal annual installments starting on January 1, 20x1 and every January 1 thereafter. The prevailing rate of interest for this type of note is 12%.

Requirements:

Question 1: How much is the interest income in 20x1?

Question 2: How much is the carrying amount of the receivable on December 31, 20x1?

Reference no: EM133010699

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