ABC Corp receives a 4 year P400,000 non interest bearing note that requires 4 equal annual installment starting immediately. The effective interest rate is 10%. How should ABC measure the note on initial recognition? a. 400,000 X PV of P1 at 10%, n=4 b. 100,000 X PV of P1 at 10%, n=4 c. 100,000 X PV of ordinary annuity of P1 at 10%, n=4 d. 100,000 X PV of an annuity due of P1 at 10%, n=4

ABC Corp receives a 4 year P400,000 non interest bearing note that requires 4 equal annual installment starting immediately. The effective interest rate is 10%. How should ABC measure the note on initial recognition? a. 400,000 X PV of P1 at 10%, n=4 b. 100,000 X PV of P1 at 10%, n=4 c. 100,000 X PV of ordinary annuity of P1 at 10%, n=4 d. 100,000 X PV of an annuity due of P1 at 10%, n=4

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

Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments

Section: Chapter Questions

Problem 3MC: Electro Corporation bought a new machine and agreed to pay for it in equal annual installments of...

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