If ABC Co. issued a 3-year non-interest bearing note in exchange of an equipment for P 1,000,000, which of the following is correct related to the recognition of the note? (market rate of interest for similar type of notes is 10%) a.P 100,000 will be credited to discount on notes payable at initial recognition. b.P 248,685.20 will be credited to discount on notes payable at initial recognition. c.The carrying value of the notes payable at the date of issuance is P 751,314.80. d. The equipment account would be debited at the amount of P 1,000,000.
If ABC Co. issued a 3-year non-interest bearing note in exchange of an equipment for P 1,000,000, which of the following is correct related to the recognition of the note? (market rate of interest for similar type of notes is 10%) a.P 100,000 will be credited to discount on notes payable at initial recognition. b.P 248,685.20 will be credited to discount on notes payable at initial recognition. c.The carrying value of the notes payable at the date of issuance is P 751,314.80. d. The equipment account would be debited at the amount of P 1,000,000.
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
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 10MC: On January 1, 2019, Park Company accepted a 36,000, non-interest-bearing, 3-year note from a major...
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If ABC Co. issued a 3-year non-interest bearing note in exchange of an equipment for P 1,000,000, which of the following is correct related to the recognition of the note? (market rate of interest for similar type of notes is 10%)
a.P 100,000 will be credited to discount on notes payable at initial recognition.
b.P 248,685.20 will be credited to discount on notes payable at initial recognition.
c.The carrying value of the notes payable at the date of issuance is P 751,314.80.
d. The equipment account would be debited at the amount of P 1,000,000.
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