On July 1, 2018, ABC Company borrowed P1,000,000 on a 10% five-year note payable. On December 31, 2018, the fair value of the note is determined to be P975,000 based on market and interest factors. The entity has elected the fair value option for reporting the financial liability. Compute the following and show your solution: a. Interest expense for 2018 b. carrying amount of the note payable on December 31, 2018
On July 1, 2018, ABC Company borrowed P1,000,000 on a 10% five-year note payable. On December 31, 2018, the fair value of the note is determined to be P975,000 based on market and interest factors. The entity has elected the fair value option for reporting the financial liability. Compute the following and show your solution: a. Interest expense for 2018 b. carrying amount of the note payable on December 31, 2018
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 1PA: On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10%...
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On July 1, 2018, ABC Company borrowed P1,000,000 on a 10% five-year note payable. On
December 31, 2018, the fair value of the note is determined to be P975,000 based on market
and interest factors. The entity has elected the fair value option for reporting the financial
liability.
Compute the following and show your solution:
a. Interest expense for 2018
b. carrying amount of the note payable on December 31, 2018
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