2,500,000. BB received a P1,000,000 cash and a 10%, 7 year. P7,000,000 note receivable every December 31 in equal annual installment of P1,000,000 plus interest starting December 31, 2021. Interest effective on this note when received is at 8% Statement 1: The amount of gain (loss) on sale should BB recognized on January 1. 2021 is P948,407. Statement 2 The interest income in BB's statement of comprehensive income for the period ending December 31, 2021 is
2,500,000. BB received a P1,000,000 cash and a 10%, 7 year. P7,000,000 note receivable every December 31 in equal annual installment of P1,000,000 plus interest starting December 31, 2021. Interest effective on this note when received is at 8% Statement 1: The amount of gain (loss) on sale should BB recognized on January 1. 2021 is P948,407. Statement 2 The interest income in BB's statement of comprehensive income for the period ending December 31, 2021 is
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter14: Long-term Liabilities: Bonds And Notes
Section: Chapter Questions
Problem 11E
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Question
On January 1, 2021, BB Company sold an equipment costing P10,000,000 and accumulated depreciation of P2,500,000. BB received a P1,000,000 cash and a 10%, 7 year. P7,000,000 note receivable every December 31 in equal annual installment of P1,000,000 plus interest starting December 31, 2021. Interest effective on this note when received is at 8%
Statement 1: The amount of gain (loss) on sale should BB recognized on January 1. 2021 is P948,407.
Statement 2 The interest income in BB's statement of comprehensive income for the period ending December 31, 2021 is P595,873.
Only statement 1 is true
Only statement 2 is true
Both statements are true
Both statements are false
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