On July 1, 2021, HAZELNUT Company acquired machinery worth ₱2,500,000 from PINE NUTS Corporation. Terms of the contract calls for a downpayment of ₱500,000 and signing a 2-year 10% note payable for the balance. Interest is payable quarterly. The existing loan agreement does not carry a provision to refinance. During September, HAZELNUT was experiencing financial difficulty and was unable to pay the periodic interest. What total amount of current liability should HAZELNUT report in its December 31, 2021 statement of financial position assuming PINE NUT agreed at report date not to demand payment as a consequence of the breach? *
On July 1, 2021, HAZELNUT Company acquired machinery worth ₱2,500,000 from PINE NUTS Corporation. Terms of the contract calls for a downpayment of ₱500,000 and signing a 2-year 10% note payable for the balance. Interest is payable quarterly. The existing loan agreement does not carry a provision to refinance. During September, HAZELNUT was experiencing financial difficulty and was unable to pay the periodic interest. What total amount of current liability should HAZELNUT report in its December 31, 2021 statement of financial position assuming PINE NUT agreed at report date not to demand payment as a consequence of the breach? *
Chapter12: Current Liabilities
Section: Chapter Questions
Problem 12EA: Scrimiger Paints wants to upgrade its machinery and on September 20 takes out a loan from the bank...
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10. On July 1, 2021, HAZELNUT Company acquired machinery worth ₱2,500,000 from PINE NUTS Corporation. Terms of the contract calls for a downpayment of ₱500,000 and signing a 2-year 10% note payable for the balance. Interest is payable quarterly. The existing loan agreement does not carry a provision to refinance. During September, HAZELNUT was experiencing financial difficulty and was unable to pay the periodic interest. What total amount of current liability should HAZELNUT report in its December 31, 2021 statement of financial position assuming PINE NUT agreed at report date not to demand payment as a consequence of the breach? *
₱ 0
₱ 100,000
₱ 50,000
₱ 2,100,000
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