Feasible Company

1,000,000.0
January 1, 2020 Cash 0
6,000,000.0
Notes Receivable 0
Land 5,000,000.00
Gain on Sale 2,000,000.00
To record sale of land in
exchange of promissory note
December 31, 2020 Interest Receivable 720,000.00
Interest Income 720,000.00
To record accrued income
December 31, 2021 Interest Receivable 806,400.00
Interest Income 806,400.00
To record accrued income
7,526,400.0
January 1, 2022 Cash 0
Interest Receivable 1,526,400.00
Notes Receivable 6,000,000.00
To record collection of
principal and interest on note

Bygone Company
January 1, 2020 Notes Receivable 600,000.00
Sales 540,000.00
Unearned Interest
Income 60,000.00
To record sale
December 31, 2020 Cash 200,000.00
Notes Receivable 200,000.00
To record collection
of principal
December 31, 2020 Unearned Interest Income 30,000.00
Interest Income 30,000.00
To record
amortization of
interest
December 31, 2021 Cash 200,000.00
Notes Receivable 200,000.00
To record collection
of principal
December 31, 2021 Unearned Interest Income 20,000.00
Interest Income 20,000.00
To record
amortization of
interest
December 31, 2022 Cash 200,000.00
Notes Receivable 200,000.00
To record collection
of principal
December 31, 2022 Unearned Interest Income 10,000.00
Interest Income 10,000.00
To record
amortization of
interest
Interest
Period Outstanding Balance Income
Year 1 600,000.00 30,000.00
Year 2 400,000.00 20,000.00
Year 3 200,000.00 10,000.00
1,200,000.00
 Innovative Company
January 1, 2020 Cash 100,000.00
Notes Receivable 900,000.00
Sale 820,540.00
Unearned Interest income 179,460.00
To record sale of equipment in
exchange of promissory note
December 31, 2020 Unearned Interest Income 86,464.80
Interest Income 86,464.80
To record amortization of interest
December 31, 2021 Unearned Interest Income 60,840.58
Interest Income 60,840.58
To record amortization of interest
December 31, 2021 Unearned Interest Income 32,154.62
Interest Income 32,154.62
To record amortization of interest
Unearned Present
Period Interest income Income value
179,460.00 720,540.00
Year 1 86,464.80 92,995.20 507,004.80
Year 2 60,840.58 32,154.62 267,845.38
Year 3 32,154.62 - 0.00

Gullible Company
December 31, 2020 Notes Receivable 2,500,000.00
Sale 2,155,000.00
Unearned Interest Income 345,000.00
To record sale
December 31, 2020 Cash 500,000.00
Notes Receivable 500,000.00
To record first
installment payment
December 31, 2021 Unearned Interest Income 132,400.00
Interest Income 132,400.00
To record amortization
of interest
December 31, 2022 Unearned Interest Income 102,992.00
Interest Income 102,992.00
To record amortization
of interest
Unearned Present
Period Interest income Income value
345,000.00 1,655,000.00
Year 1 132,400.00 212,600.00 1,287,400.00
Year 2 102,992.00 109,608.00 890,392.00
Year 3 71,231.36 38,376.64 461,623.36
Year 4 38,376.64 - - 0.00

Nova Company
8% Note Receivable 3,000,000.00
Interest Receivable 180,000.00
Other Note Receivable 1,000,000.00
Interest Receivable 10,000.00
Interest Receivable 6%
Interest Income 2021
8% Note Receivable 60,000.00
6% Note Receivable 50,000.00
Total 110,000.00
Accounts Receivable, 2020 5,100,000.00
Sales Revenue, 2021 21,000,000.00
Cash Collection - 18,000,000.00
Write-off - 600,000.00
Accounts Receivable, 2021 7,500,000.00
Allowance, 2020 500,000.00
Doubtful Accts Expense (squeeze) 850,000.00
Write-off - 600,000.00
Allowance, 2021 750,000.00

Persevere Company
Annual payments 500,000.00
Present value factor 3.99
Carrying amount, 12/31/20 1,995,000.00
Interest rate 8%
Interest income, 2021 159,600.00
Interest income, 2022 132,368.00
Principal payments 1,000,000.00
Carrying amount, 12/31/22 1,286,968.00
Interest income, 2023 102,957.44
Unearned income, 12/31/20 505,000.00
Unearned income, 12/31/23 110,074.56

Precious Company
Annual payments 500,000.00
Present value factor 5.65
Present value of note 2,825,000.00
Carrying amount of equip 2,000,000.00
Gain on sale 825,000.00
Interest income, 12/31/21 339,000.00
Carrying amount, 12/31/21 2,664,000.00
Interest income, 12/31/22 319,680.00
Carrying amount, 12/31/22 2,483,680.00