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Prepare the journal entries to record transaction on january

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Question - On January 2, 2020, Adani Inc. sells goods to Geo Company in exchange for a zero-interest-bearing note with a face value of $11,000, with payment due in 12 months. The fair value of the goods at the date of sale is $10,000 (cost $6,000). Assume that the company chooses to reflect the interest component.

Required -

(a) Prepare the journal entries to record this transaction on January 2, 2020.

(b) How much total revenue should be recognized in 2020?

(c) Using Excel or a financial calculator, determine the interest rate that will be earned by Adani.

Reference no: EM132731741

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