On January 1, 2019, a company acquired transportation equipment by paying cash of P400,000 and issuing a noninterest-bearing note payable of P4,000,000 due in 4 equal annual installments starting December 31, 2019. The prevailing rate of interest of this type of note is 12%. (PVF 6 decimal) 1. How much is the interest expense in 2019? 2. How much is the carrying amount of the note on December 31, 2019? 3. How much is the noncurrent portion of the note on December 31, 2019? 4. How much is the current portion of the note on December 31, 2019?
On January 1, 2019, a company acquired transportation equipment by paying cash of P400,000 and issuing a noninterest-bearing note payable of P4,000,000 due in 4 equal annual installments starting December 31, 2019. The prevailing rate of interest of this type of note is 12%. (PVF 6 decimal) 1. How much is the interest expense in 2019? 2. How much is the carrying amount of the note on December 31, 2019? 3. How much is the noncurrent portion of the note on December 31, 2019? 4. How much is the current portion of the note on December 31, 2019?
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
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 30E
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On January 1, 2019, a company acquired transportation equipment by paying cash of
P400,000 and issuing a noninterest-bearing note payable of P4,000,000 due in 4
equal annual installments starting December 31, 2019. The prevailing rate of interest
of this type of note is 12%.
(PVF 6 decimal)
1. How much is the interest expense in 2019?
2. How much is the carrying amount of the note on December 31, 2019?
3. How much is the noncurrent portion of the note on December 31, 2019?
4. How much is the current portion of the note on December 31, 2019?
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