n January 1, 2021, Cee Company sold a machine with a cost of P500,000 and carrying value of P150,000 to Tee Company. In lieu of cash payment, Tee Company gave Cee a 4-year, P100,000, 10% note. The note requires interest to be paid annually on December 31. The prevailing rate of interest for a note of this type is 16% and the principal amount of the note
n January 1, 2021, Cee Company sold a machine with a cost of P500,000 and carrying value of P150,000 to Tee Company. In lieu of cash payment, Tee Company gave Cee a 4-year, P100,000, 10% note. The note requires interest to be paid annually on December 31. The prevailing rate of interest for a note of this type is 16% and the principal amount of the note
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 24E: Notes Receivable and Income On January 1, 2019, Pitt Company sold a patent to Chatham Inc. which had...
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On January 1, 2021, Cee Company sold a machine with a cost of P500,000 and carrying value of P150,000 to Tee Company. In lieu of cash payment, Tee Company gave Cee a 4-year, P100,000, 10% note. The note requires interest to be paid annually on December 31.
The prevailing rate of interest for a note of this type is 16% and the principal amount of the note is to be paid in four equal annual instalments of P25,000 every December 31.
Required: Compute the following: (Round off PV factors to 4 decimal places before multiplying.)
1. Gain or loss on sale of machinery (place parenthesis if loss)
2. Interest income
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