On July 31, 2021, Sampaguita Company borrowed from a bank via issuing a 13.5% note. Transaction costs of P40,000 related to the borrowing was paid. The note was irrevocably designated at fair value for measuring purposes. Analyzing the changes in the fair value at yearend, P20,000 was attributable to credit risk. The net effects of the note are the following: P276,250 loss for the 2021 Income Statement and P256,250 loss on the 2021 Statement of Comprehensive Income. How much is the face value of the note?

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
Chapter18: Accounting For Income Taxes
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Problem 9MC: Brooks Company reported a prior period adjustment of 512,000 in pretax financial "income" and...
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On July 31, 2021, Sampaguita Company borrowed from a bank via issuing a 13.5% note. Transaction costs of P40,000 related to the borrowing was paid. The note was irrevocably designated at fair value for measuring purposes. Analyzing the changes in the fair value at yearend, P20,000 was attributable to credit risk.

The net effects of the note are the following: P276,250 loss for the 2021 Income Statement and P256,250 loss on the 2021 Statement of Comprehensive Income.

How much is the face value of the note?
 
 
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