On January 1, 2020, the Dolce Corporation issued a three-year, non-interest bearing note with face value of P3,000,000 for a piece of land purchased from Jardine Corporation. The note is payable in annual installments of P1,000,000 every December 31, starting on December 31, 2020. The land has an equivalent cash price of P2,400,000, a price that provides the note an effective interest rate of 12%. Question: Using the infro above, what is tha balance of Discount on Notes Payable at December 31, 2020? ANSWER: P312,000 Explain why
On January 1, 2020, the Dolce Corporation issued a three-year, non-interest bearing note with face value of P3,000,000 for a piece of land purchased from Jardine Corporation. The note is payable in annual installments of P1,000,000 every December 31, starting on December 31, 2020. The land has an equivalent cash price of P2,400,000, a price that provides the note an effective interest rate of 12%. Question: Using the infro above, what is tha balance of Discount on Notes Payable at December 31, 2020? ANSWER: P312,000 Explain why
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, the Dolce Corporation issued a three-year, non-interest bearing note with face value of P3,000,000 for a piece of land purchased from Jardine Corporation. The note is payable in annual installments of P1,000,000 every December 31, starting on December 31, 2020. The land has an equivalent cash price of P2,400,000, a price that provides the note an effective interest rate of 12%.
Question: Using the infro above, what is tha balance of Discount on Notes Payable at December 31, 2020?
ANSWER: P312,000
Explain why 132,000 is the answer. Provide a detailed solution.
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