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 fair value of the note at yearend 2021?
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 fair value of the note at yearend 2021?
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
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 14RE: On January 1, 2019, Boater Company issues a 20,000 non-interest-bearing, 5-year note for equipment....
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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 fair value of the note at yearend 2021?
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