At the beginning of 2016, gannon company received a three-year zero-interest-bearing $1,000 trade note. the market rate for equivalent notes was 8% at that time. gannon reported this note as a $1,000 trade note receivable on its 2016 year-end statement of financial position and $1,000 as sales revenue for 2016. what effect did this accounting for the note have on gannon's net earnings for 2016, 2017, 2018, and its retained earnings at the end of 2018, respectively? group of answer choices : a. overstate, overstate, understate, zerob. overstate, understate, understate, understatec. overstate, overstate, overstate, overstated. overstate, understate, understate, write down the correct general entries for all

d. Overstate, understate, understate, zero

Explanation:

The amount of earnings overall is the same. so, in the end, there is n difference in retained earnings.

But, on accrual accounting, the note should not enter the accounting as 1,000 as time value of money exist.

At 2016 the sales revenue should be the present value of 1,000 dollars not the complete 1,000 dollars. Thus, is overstated.

Then, the interest accrued from the note are not recognized. Thus, the first year (2016) recognize revenues that should be matched with 2017 and 2018

Thus, these two subsequent years ended understated.

muslims control the north africa during the period of 1500 up

to 1800. they made a barrier to prevent further european exploration from

entering the africa from the north. however, the dutch ware still able to move

toward the interior with having south africa as one of the routes leading to

the east for trading with asia.