On January 1, 2023, Juan Co. received a P4,000,000, 10% note from a customer upon the sale of its goods. The note is to be paid in six equal semi-annual installments, plus interest on the outstanding balance every June 30 and December 31, starting June 30, 2023. The effective rate on the note is 9%. 1. How much is the note upon initial recognition? 2. How much is the interest income recognized by Juan in 2023? 3. How much is the carrying amount of the note on December 31, 2024?
On January 1, 2023, Juan Co. received a P4,000,000, 10% note from a customer upon the sale of its goods. The note is to be paid in six equal semi-annual installments, plus interest on the outstanding balance every June 30 and December 31, starting June 30, 2023. The effective rate on the note is 9%. 1. How much is the note upon initial recognition? 2. How much is the interest income recognized by Juan in 2023? 3. How much is the carrying amount of the note on December 31, 2024?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On January 1, 2023, Juan Co. received a P4,000,000, 10% note from a customer upon the sale of its
goods. The note is to be paid in six equal semi-annual installments, plus interest on the outstanding
balance every June 30 and December 31, starting June 30, 2023. The effective rate on the note is 9%.
1. How much is the note upon initial recognition?
2. How much is the interest income recognized by Juan in 2023?
3. How much is the carrying amount of the note on December 31, 2024?
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