On January 1, 20x1, Otters Co. received a 3-year, noninterest bearing note of P1,200,000 in exchange for equipment with historical cost of P2,000,000 and accumulated depreciation of P700,000. The note is due three equal annual installations beginning on January 1, 20x1 and every January 1 thereafter. The effective interest rate is 10% Requirements: a. Prepare the amortization table. b. How much is the interest income in 20x1? c. How much is the carrying amount of the receivable on Dec. 31, 20x1?
On January 1, 20x1, Otters Co. received a 3-year, noninterest bearing note of P1,200,000 in exchange for equipment with historical cost of P2,000,000 and accumulated depreciation of P700,000. The note is due three equal annual installations beginning on January 1, 20x1 and every January 1 thereafter. The effective interest rate is 10% Requirements: a. Prepare the amortization table. b. How much is the interest income in 20x1? c. How much is the carrying amount of the receivable on Dec. 31, 20x1?
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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