On january 1 2007 lex co. sold goods to eaton company., Ask an Expert

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On January 1, 2007, Lex Co. sold goods to Eaton Company. Eaton signed a noninterest-bearing note requiring payment of $80,000 annually for seven years. The first payment was made on January 1, 2007. The prevailing rate of interest for this type of note at date of issuance was 10%. Information on present value factors is as follows:

Present Value Present Value of Ordinary
Period of 1 at 10% Annuity of 1 at 10%
6 .5645 4.3553
7 .5132 4.8684

Lex should record sales revenue in January 2007 of:

a. $428,419.

b. $389,472.

c. $348,424.

d. $285,600.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9444730

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