On December 31, 2021, Chang Company sold a machihe in the ordinary course of business to Door Company in exchange for a noninterest bearing note requiring ten annual payments of P1,000,000. The entity made the first payment on December 31, 2021. The market interest rate for similar notes at date of issuance was 8%. PV of an ordinary annuity of 1 at 8% for 9 periods PV of an ordinary annuity of 1 at 8% for 10 periods 6.25 6.71 1. What amount should be reported as sales revenue? a. 7,250,000 b. 5,000,000 c. 6,250,000 d. 8,000,000 2. On December 31, 2021, what is the carrying amount of the note receivable? a. 4,500,000 b. 4,600,000 c. 6,250,000 d. 6,710,000 3. What amount should be reported as interest income for 2022? a. 580,000 b. 720,000 с. 500,000 d. 625,000
On December 31, 2021, Chang Company sold a machihe in the ordinary course of business to Door Company in exchange for a noninterest bearing note requiring ten annual payments of P1,000,000. The entity made the first payment on December 31, 2021. The market interest rate for similar notes at date of issuance was 8%. PV of an ordinary annuity of 1 at 8% for 9 periods PV of an ordinary annuity of 1 at 8% for 10 periods 6.25 6.71 1. What amount should be reported as sales revenue? a. 7,250,000 b. 5,000,000 c. 6,250,000 d. 8,000,000 2. On December 31, 2021, what is the carrying amount of the note receivable? a. 4,500,000 b. 4,600,000 c. 6,250,000 d. 6,710,000 3. What amount should be reported as interest income for 2022? a. 580,000 b. 720,000 с. 500,000 d. 625,000
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 24E: Notes Receivable and Income On January 1, 2019, Pitt Company sold a patent to Chatham Inc. which had...
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