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What is amount of interest revenue that abc company report

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Question - ABC Company's accounting year ends on December 31 of each year. On December 31, 2018 ABC Co. received a promissory note from 123 Co. in exchange for services provided by ABC Company. The fair market value of the services is not known and the fair market value of the note is not known. The note calls for two payment of $500, 000 each: one on December 31, 2019 and one on December 31, 2020. No interest is specified in the note. ABC Company computed the present value of the note to be $850, 000 as of December 31, 2018.

Required -

1. The amount of service revenue that ABC Company should report in 2018 is?

2. What is the amount of interest revenue that ABC Company should report in 2018?

3. The carrying value of the note at December 31, 2019 is?

4. If the discount is a significant amount in light of ABC Company's net income and other financial information, what method of amortization should be used?

Reference no: EM132655942

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