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On January 1, 2006, Marr Co

Question 21

Multiple Choice

On January 1, 2006, Marr Co.exchanged equipment for a $400,000 zero-interest-bearing note due on January 1, 2009.The prevailing rate of interest for a note of this type at January 1, 2006 was 10%.The present value of $1 at 10% for three periods is 0.75.What amount of interest revenue should be included in Marr's 2007 income statement?


A) $0
B) $30,000
C) $33,000
D) $40,000

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