Problem 19 Marianne Company is a dealer in equipment. On December 31, 2019, Marianne Company sold equipment in exchange for a noninterest bearing note requiring five annual payments of P1, 000,000. The first payment was made on December 31, 2020. The market interest for similar notes was 8%. The relevant present value factors are: PV of lat 8% for 5 periods PV of an ordinary annuity of 1 at 8% for 5 periods 0.68 3.99 In its December 31, 2020 statement of financial position, what should Marianne report as note receivable? a. 4, 000,000 b. 3,990,000 c. 3,309,200 d. 4,309,200
Problem 19 Marianne Company is a dealer in equipment. On December 31, 2019, Marianne Company sold equipment in exchange for a noninterest bearing note requiring five annual payments of P1, 000,000. The first payment was made on December 31, 2020. The market interest for similar notes was 8%. The relevant present value factors are: PV of lat 8% for 5 periods PV of an ordinary annuity of 1 at 8% for 5 periods 0.68 3.99 In its December 31, 2020 statement of financial position, what should Marianne report as note receivable? a. 4, 000,000 b. 3,990,000 c. 3,309,200 d. 4,309,200
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
Chapter9: Current Liabilities And Contingent Obligations
Section: Chapter Questions
Problem 6P: Non-Interest-Bearing Note Payable: Present Value On January 1, 2019, Northern Manufacturing Company...
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Transcribed Image Text:Problem 19
Marianne Company is a dealer in equipment. On December 31, 2019, Marianne Company
sold equipment in exchange for a noninterest bearing note requiring five annual payments
of P1, 000,000. The first payment was made on December 31, 2020. The market interest
for similar notes was 8%. The relevant present value factors are:
PV of lat 8% for 5 periods
PV of an ordinary annuity of 1 at 8% for 5 periods
0.68
3.99
In its December 31, 2020 statement of financial position, what should Marianne report as
note receivable?
a. 4, 000,000
b. 3,990,000
c. 3,309,200
d. 4,309,200
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