Homework Help is Here – Start Your Trial Now!
Business
Accounting
Problem 10: Use the following information for the next three questions: On January 1, 2021, DELAY Co. sold transportation equipment with a historical cost of P8,000.000 and accumulated depreciation of P2,800,000. In consideration for the sale, DELAY Co. received cash of P400,000 and a noninterest-bearing note receivable of P4,000,000 due in 4 equal annual installments. The first installment was made on January 1, 2021. The prevailing rate of interest for this type of note is 12%. 29. How much is the carying amount of the note on initial recognition? 30. How much is the interest income for 2021? 31. How much is the carying amount of the note on January 1, 2022?

Problem 10: Use the following information for the next three questions: On January 1, 2021, DELAY Co. sold transportation equipment with a historical cost of P8,000.000 and accumulated depreciation of P2,800,000. In consideration for the sale, DELAY Co. received cash of P400,000 and a noninterest-bearing note receivable of P4,000,000 due in 4 equal annual installments. The first installment was made on January 1, 2021. The prevailing rate of interest for this type of note is 12%. 29. How much is the carying amount of the note on initial recognition? 30. How much is the interest income for 2021? 31. How much is the carying amount of the note on January 1, 2022?

Intermediate Accounting: Reporting And Analysis
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 24E: Notes Receivable and Income On January 1, 2019, Pitt Company sold a patent to Chatham Inc. which had...
See similar textbooks
icon
Related questions
Question
Problem 10: Use the following information for the next three questions: On January 1, 2021, DELAY Co. sold transportation equipment with a historical cost of P8,000.000 and accumulated depreciation of P2,800,000. In consideration for the sale, DELAY Co. received cash of P400,000 and a noninterest-bearing note receivable of P4,000,000 due in 4 equal annual installments. The first installment was made on January 1, 2021. The prevailing rate of interest for this type of note is 12%. 29. How much is the carying amount of the note on initial recognition? 30. How much is the interest income for 2021? 31. How much is the carrying amount of the note on January 1, 2022? Problem 11: Use the following information for the next three questions: On January 1, 2021, FORCEFUL Co. sold machinery with historical cost of P8,000,000 and accumulated depreciation of P4,400,000 in exchange for a 3-year, P4,800,000 noninterest-bearing note receivable due in equal semi-annual payments starting July 1, 2021. The prevailing rate of interest of this type of note is 10%. 32. How much is the carrying amount of the note on initial recognition? 33. How much is the interest income for 2021 34. How much is the carrying amount of the note on December 31, 2021?
Transcribed Image Text:Problem 10: Use the following information for the next three questions: On January 1, 2021, DELAY Co. sold transportation equipment with a historical cost of P8,000.000 and accumulated depreciation of P2,800,000. In consideration for the sale, DELAY Co. received cash of P400,000 and a noninterest-bearing note receivable of P4,000,000 due in 4 equal annual installments. The first installment was made on January 1, 2021. The prevailing rate of interest for this type of note is 12%. 29. How much is the carying amount of the note on initial recognition? 30. How much is the interest income for 2021? 31. How much is the carrying amount of the note on January 1, 2022? Problem 11: Use the following information for the next three questions: On January 1, 2021, FORCEFUL Co. sold machinery with historical cost of P8,000,000 and accumulated depreciation of P4,400,000 in exchange for a 3-year, P4,800,000 noninterest-bearing note receivable due in equal semi-annual payments starting July 1, 2021. The prevailing rate of interest of this type of note is 10%. 32. How much is the carrying amount of the note on initial recognition? 33. How much is the interest income for 2021 34. How much is the carrying amount of the note on December 31, 2021?
Expert Solution
steps

Step by step

Solved in 3 steps with 2 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Accounting for Notes
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Financial Reporting, Financial Statement Analysis…
Financial Reporting, Financial Statement Analysis…
Finance
ISBN:
9781285190907
Author:
James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:
Cengage Learning
EBK CFIN
EBK CFIN
Finance
ISBN:
9781337671743
Author:
BESLEY
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Financial Accounting Intro Concepts Meth/Uses
Financial Accounting Intro Concepts Meth/Uses
Finance
ISBN:
9781285595047
Author:
Weil
Publisher:
Cengage
College Accounting (Book Only): A Career Approach
College Accounting (Book Only): A Career Approach
Accounting
ISBN:
9781337280570
Author:
Scott, Cathy J.
Publisher:
South-Western College Pub
SEE MORE TEXTBOOKS