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On January 01, 2022, TGIF Company sold equipment costing 10,000,000 with accumulated depreciation of 5,500,000 in exchange for a 6,000,000 noninterest-bearing note due in equal annual installments of 2,000,000 every December 31, 2022. There was no established exchange price for the equipment and the note had no ready market. The prevailing rate of interest for a note of this type on January 01, 2022, was 10%.    What is the carrying amount of the note on December 31, 2022?

On January 01, 2022, TGIF Company sold equipment costing 10,000,000 with accumulated depreciation of 5,500,000 in exchange for a 6,000,000 noninterest-bearing note due in equal annual installments of 2,000,000 every December 31, 2022. There was no established exchange price for the equipment and the note had no ready market. The prevailing rate of interest for a note of this type on January 01, 2022, was 10%.    What is the carrying amount of the note on December 31, 2022?

Intermediate Accounting: Reporting And Analysis
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 01, 2022, TGIF Company sold equipment costing 10,000,000 with accumulated depreciation of 5,500,000 in exchange for a 6,000,000 noninterest-bearing note due in equal annual installments of 2,000,000 every December 31, 2022. There was no established exchange price for the equipment and the note had no ready market. The prevailing rate of interest for a note of this type on January 01, 2022, was 10%. 

 
What is the carrying amount of the note on December 31, 2022?

 

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