On January 1, 2014, Ball Co

Multiple Choice

On January 1, 2014, Ball Co. exchanged equipment for a $500,000 zero-interest-bearing note due on January 1, 2017. The prevailing rate of interest for a note of this type at January 1, 2014 was 10%. The present value of $1 at 10% for three periods is 0.75. What amount of interest revenue should be included in Ball's 2015 income statement?

A) $0
B) $37,500
C) $41,250
D) $50,000