On 31 December 2017, PC sold used equipment with carrying amount of P2,000,000 in exchange for a non-interest bearing note of P5,000,000 requiring ten annual payments of P500,000. The first payment was mad on 31 December 2018. The market interest for similar note was 12%. (use 2 decimal places for PV factors) What amount should be recognized as interest income for 2018? What is the gain on sale of equipment to be recognized in 2017?
On 31 December 2017, PC sold used equipment with carrying amount of P2,000,000 in exchange for a non-interest bearing note of P5,000,000 requiring ten annual payments of P500,000. The first payment was mad on 31 December 2018. The market interest for similar note was 12%. (use 2 decimal places for PV factors) What amount should be recognized as interest income for 2018? What is the gain on sale of equipment to be recognized in 2017?
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 1PA: On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10%...
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On 31 December 2017, PC sold used equipment with carrying amount of P2,000,000 in exchange for a non-interest bearing note of P5,000,000 requiring ten annual payments of P500,000. The first payment was mad on 31 December 2018. The market interest for similar note was 12%. (use 2 decimal places for PV factors)
- What amount should be recognized as interest income for 2018?
- What is the gain on sale of equipment to be recognized in 2017?
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