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On January 1, 2020, Lily Co. sold machinery with historical cost of P6,000,000 and accumulated depreciation of P2,500,000 in exchange for a 3-year, 6%, P3,000,000 note receivable. Principal is due January 1, 2023 but interests are due semi-annually every December 31. The effective interest rate for this type of note is 10%. How much is the interest income in 2022?

On January 1, 2020, Lily Co. sold machinery with historical cost of P6,000,000 and accumulated depreciation of P2,500,000 in exchange for a 3-year, 6%, P3,000,000 note receivable. Principal is due January 1, 2023 but interests are due semi-annually every December 31. The effective interest rate for this type of note is 10%. How much is the interest income in 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 10MC: On January 1, 2019, Park Company accepted a 36,000, non-interest-bearing, 3-year note from a major...
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On January 1, 2020, Lily Co. sold machinery with historical cost of P6,000,000 and accumulated depreciation of P2,500,000 in exchange for a 3-year, 6%, P3,000,000 note receivable. Principal is due January 1, 2023 but interests are due semi-annually every December 31. The effective interest rate for this type of note is 10%.

How much is the interest income in 2022? 

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