3. On January 1, 20x1, Otters Co. issued a 3-year, noninterest bearing note of P1,200,000 in exchange for equipment. The note is due in three equal annual installments beginning on January 1, 20x1 and every January 1 thereafter. The effective interest rate is 10%. Requirements: a) Prepare amortization table; b) How much is the interest expense in 20x1?; c) How much is the carrying amount of the note on Dec 31, 20x1?
3. On January 1, 20x1, Otters Co. issued a 3-year, noninterest bearing note of P1,200,000 in exchange for equipment. The note is due in three equal annual installments beginning on January 1, 20x1 and every January 1 thereafter. The effective interest rate is 10%. Requirements: a) Prepare amortization table; b) How much is the interest expense in 20x1?; c) How much is the carrying amount of the note on Dec 31, 20x1?
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Transcribed Image Text:3. On January 1, 20x1, Otters Co. issued a 3-year, noninterest bearing note of
P1,200,000 in exchange for equipment. The note is due in three equal annual
installments beginning on January 1, 20x1 and every January 1 thereafter.
The effective interest rate is 10%.
Requirements: a) Prepare amortization table; b) How much is the
interest expense in 20x1?; c) How much is the carrying amount of the
note on Dec 31, 20x1?
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