A Company acquired a packaging machine from Taylor Corporation. Taylor completed the construction of the machine on January 1, 2029. In payment for the P3 million machine, A Company issued a 4-year interest-bearing note to be paid in four equal payments at the end of each year. Interest is 10% of the unpaid balance to be paid at the end of each year. Assume prevailing interest rate is 14%. At what amount should the note be recorded on January 1. 2029?
A Company acquired a packaging machine from Taylor Corporation. Taylor completed the construction of the machine on January 1, 2029. In payment for the P3 million machine, A Company issued a 4-year interest-bearing note to be paid in four equal payments at the end of each year. Interest is 10% of the unpaid balance to be paid at the end of each year. Assume prevailing interest rate is 14%. At what amount should the note be recorded on January 1. 2029?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter20: Accounting For Leases
Section: Chapter Questions
Problem 10MC: On August 1, 2019, Kern Company leased a machine to Day Company for a 6-year period requiring...
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59. A Company acquired a packaging machine from Taylor Corporation. Taylor completed the construction of the machine
on January 1, 2029. In payment for the P3 million machine, A Company issued a 4-year interest-bearing note to be paid in four equal payments at the end of each year. Interest is 10% of the unpaid balance to be paid at the end of each year. Assume prevailing interest rate is 14%. At what amount should the note be recorded on January 1. 2029?
On December 31, 2019, A Company issued 5,000 of 8% 10-year P1,000 face value bonds with detachable warrants at 110. Each bond carried a detachable warrant for 10 ordinary shares of P100 par value at a specified option price of P120. Immediately after issuance, the market value of the bonds without warrants was P4,800,000 and the market value of the warrants was P1,200,000. On December 31, 2019, what is the carrying amount of bonds payable?
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