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12. On November 1, 20x1, Forgive Co. discounted a P1,000,000, 90-day, 12% note, dated September 15, 20x1, with a bank at 16% on with recourse basis. The discounting is treated as conditional sale. The bank uses 365 days per year in computing for discounts. On December 14, 20x1 (maturity date), the maker of the note defaulted and the bank charged Forgive Co. the maturity value of the note plus a P1,00C protest fee. What amount is reclassified to accounts receivable on Dec 14 20x12

12. On November 1, 20x1, Forgive Co. discounted a P1,000,000, 90-day, 12% note, dated September 15, 20x1, with a bank at 16% on with recourse basis. The discounting is treated as conditional sale. The bank uses 365 days per year in computing for discounts. On December 14, 20x1 (maturity date), the maker of the note defaulted and the bank charged Forgive Co. the maturity value of the note plus a P1,00C protest fee. What amount is reclassified to accounts receivable on Dec 14 20x12

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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12. On November 1, 20x1, Forgive Co. discounted a P1,000,000, 90-day, 12% note, dated September 15, 20x1, with a bank at 16% on with recourse basis. The discounting is treated as conditional sale. The bank uses 365 days per year in computing for discounts. On December 14, 20x1 (maturity date), the maker of the note defaulted and the bank charged Forgive Co. the maturity value of the note plus a P1,000 protest fee. What amount is reclassified to accounts receivable on Dec. 14, 20x1? 1,000,000 b. 1,029,589 c. 1,030,589 a. d. 1,045,604
Transcribed Image Text:12. On November 1, 20x1, Forgive Co. discounted a P1,000,000, 90-day, 12% note, dated September 15, 20x1, with a bank at 16% on with recourse basis. The discounting is treated as conditional sale. The bank uses 365 days per year in computing for discounts. On December 14, 20x1 (maturity date), the maker of the note defaulted and the bank charged Forgive Co. the maturity value of the note plus a P1,000 protest fee. What amount is reclassified to accounts receivable on Dec. 14, 20x1? 1,000,000 b. 1,029,589 c. 1,030,589 a. d. 1,045,604
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