On December 31, 2019 an entity received two P2,000,000 notes receivable from customers. On both notes interest is calculated on the outstanding principal balance at the annual rate of 3% and the payable at maturity. The first note, made under customary trade terms, is due in nine months and the second note is due in five years. The market interest for similar notes on December 31, 2019 was 8% the PV of 1 at 8% due in nine months is .944, and the PV of 1 at 8% due in 5 years is .68. What is the carrying amount of the first note receivable? What is the second amount of second note receivable?
On December 31, 2019 an entity received two P2,000,000 notes receivable from customers. On both notes interest is calculated on the outstanding principal balance at the annual rate of 3% and the payable at maturity. The first note, made under customary trade terms, is due in nine months and the second note is due in five years. The market interest for similar notes on December 31, 2019 was 8% the PV of 1 at 8% due in nine months is .944, and the PV of 1 at 8% due in 5 years is .68. What is the carrying amount of the first note receivable? What is the second amount of second note receivable?
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
Chapter6: Cash And Receivables
Section: Chapter Questions
Problem 14RE: On June 1, Phillips Corporation sold, with recourse, a note receivable from a customer to a bank....
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On December 31, 2019 an entity received two P2,000,000 notes receivable from customers. On both notes interest is calculated on the outstanding principal balance at the annual rate of 3% and the payable at maturity. The first note, made under customary trade terms, is due in nine months and the second note is due in five years. The market interest for similar notes on December 31, 2019 was 8% the PV of 1 at 8% due in nine months is .944, and the PV of 1 at 8% due in 5 years is .68.
What is the carrying amount of the first note receivable?
What is the second amount of second note receivable?
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