On January 1, 2010, WPK Co. sold a transportation equipment with a historical cost of P1,000,000 and accumulated depreciation of P300,000 in exchange for cash of P100,000 and a noninterest-bearing note receivable of P800,000 due on January 1, 2013. The prevailing rate of interest for this type of note is 12%. What is the net effect of the transaction in WPK's 2010 profit or loss?
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- 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. 36,000On 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. 6,000On January 1, Kilgore Inc. accepts a 20,000 non-interest-bearing, 5-year note from Dieland Company for equipment. Neither the fair value of the note nor the equipment is determinable. Kilgore had originally purchased the equipment for 18,000, and the equipment has a book value of 14,000 on January 1. Kilgore knows Dielands incremental borrowing rate of 9%. Prepare the journal entry for Kilgore to record the sale of the equipment on January 1.
- On January 01, 2022, Legit 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?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 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 1, 2021, ABC Co. sold a transportation equipment with a historical cost of ₱1,000,000 and accumulated depreciation of ₱300,000 in exchange for cash of ₱100,000 and a noninterest-bearing note receivable of ₱800,000 due on January 1, 2025. The prevailing rate of interest for this type of note is 12%. How much is the gain / (loss) on sale? How much is the unamortized interest on December 31, 2023?On January 1, 2017, Emme Company sold equipment with a carrying amount of P4,800,000 in exchange for a P6,000,000 noninterest bearing note due January 1, 2020. There was no established exchange price for the equipment.The prevailing rate of interest for a note of this type on January 1, 2017 was 10%. The present value of 1 at 10% for three periods is 0.75.What amount should be reported as gain or loss on sale of equipment?On January 01, 2021, Scottie Boo 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, 2021. 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, 2021 was 10%. What is the carrying amount of the note on December 31, 2021? (Round off the present value factors to 4 decimal places)
- Danica Corporation sold one of its buildings on January 1, 2007 for P20,000,000. Danica received a cash down payment of P5,000,000 and a 5-year, 10% note for the balance of P15,000,000. The note is payable in equal annual payments of principal and interest of P3,957,000 payable on December 31 of each year until the year 2011. What amount is to be reported as current notes receivable on December 31, 2008? A. 2,457,000 B. 2,702,700 C. 2,972,970 D. 3,000,000On January 01, 2021, The Company sold equipment costing P760,000 with accumulated depreciation of P320,000 on the date of sale. Company received as consideration for the sale, a P800,000 noninterest-bearing note due January 1, 2025. 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, 2021 was 5%. Using two decimal places for the present value (PV) factor, what is the note’s carrying amount on December 31, 2021?On January 01, 2021, VKS Company sold equipment costing P760,000 with accumulated depreciation of P320,000 on the date of sale. CPA received as consideration for the sale, a P800,000 noninterest-bearing note due January 1, 2025. 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, 2021 was 5%. Using two decimal places for the present value (PV) factor, what is the note’s carrying amount on December 31, 2021?