On January 01, 2022, TGIF Company sold equipment costing P10,000,000 with accumulated depreciation of P5,500,000 in exchange for a P6,000,000 noninterest bearing note due in equal annual installments of P2,000,000 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 at January 01, 2022 was 10%. What is the carrying amount of the note on December 31, 2022? (Round off the present value factors to 4 decimal places)

On January 01, 2022, TGIF Company sold equipment costing P10,000,000 with accumulated depreciation of P5,500,000 in exchange for a P6,000,000 noninterest bearing note due in equal annual installments of P2,000,000 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 at January 01, 2022 was 10%. What is the carrying amount of the note on December 31, 2022? (Round off the present value factors to 4 decimal places)

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 July 1, 2019, Aldrich Company purchased as an available-for-sale security 200,000 face value, 9% U.S. Treasury notes for 194,000. The notes mature July 1, 2020, and pay interest semiannually on January 1 and July 1. The notes were sold on December 1, 2019, for 199,000. Aldrich normally uses straight-line amortization on all of its notes. In its income statement for the year ended December 31, 2019, what amount should Aldrich report as a gain on the sale of the available-for-sale security? a. 2,500 b. 3,500 c. 5,000 d. 6,000
On January 1, 2019, Park Company accepted a 36,000, non-interest-bearing, 3-year note from a major customer in exchange for used equipment. The equipment had originally cost Park 200,000 and had a book value of 20,000 on the date of the sale. At the 12% imputed interest rate for this type of loan, the present value of the note is 25,500 on January 1, 2019. Park uses the effective interest rate. What is the carrying value of the note receivable on Parks December 31, 2019, balance sheet? a. 28,560 b. 29,000 c. 32,500 d. 36,000
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16. On January 1, 2020, CPA Incorporated sold its aggregate equipment. The buyer issued a promissory note with a face amount of P10,000,000 and stated interest rate of 6%. The note is payable in annual installments of P2,000,000 plus accrued interest on the outstanding balance. The first installment is due on December 31, 2020. There is no established cash price for this type of aggregate equipment and the note has no ready market. The prevailing interest for a note of this type is 12%. The aggregate equipment has a cost of P12,000,000 and an accumulated depreciation of P2,600,000 as of January 1, 2020. What will be the carrying amount of the Notes Receivable as of December 31, 2022? (Use four-decimal places and round off the final answer to the nearest peso.)
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