oninterest bearing note requiring five annual payments of P500,000. The first payment was made on December 31, 2020. The market interest for similar notes was 8%. The relevant present value factors were: PV of 1 at 8% for 5 periods 0.68 PV of an ordinary annuity of 1 at 8% for 5 periods 3.99 REQUIRED: Prepare journal entries for 2019 and 2020. Determine the carrying amount of the note receivable on December 31, 2020. Determine the interest income for 2021.
oninterest bearing note requiring five annual payments of P500,000. The first payment was made on December 31, 2020. The market interest for similar notes was 8%. The relevant present value factors were: PV of 1 at 8% for 5 periods 0.68 PV of an ordinary annuity of 1 at 8% for 5 periods 3.99 REQUIRED: Prepare journal entries for 2019 and 2020. Determine the carrying amount of the note receivable on December 31, 2020. Determine the interest income for 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
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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Kaku Company is a dealer in equipment. On December 31, 2019, the entity sold an equipment in exchange for a noninterest bearing note requiring five annual payments of P500,000.
The first payment was made on December 31, 2020. The market interest for similar notes was 8%. The relevant present value factors were:
PV of 1 at 8% for 5 periods
0.68
PV of an ordinary annuity of 1 at 8% for 5 periods
3.99
REQUIRED:
Prepare
Determine the carrying amount of the note receivable on December 31, 2020.
Determine the interest income for 2021.
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