An entity accepted from a customer in settlement of an account a P4,000, 000. 90-day 12% note dated August 31, 2019. On September 30, 20119, the entity discounted the note at 15% with recourse at the bank. The note was paid in full by the maker on maturity. The discounting is accounted for as a conditional sale with recognition of a contingent liability. 1. What amount was received from the note receivable discounting? a. 4,017,000 b. 4,120,000 c. 4,103,000 d. 3,965,500 2. What is the loss on note receivable discounting? а. 40,000 b. 23,000 с. 17,000 d. 20,000

An entity accepted from a customer in settlement of an account a P4,000, 000. 90-day 12% note dated August 31, 2019. On September 30, 20119, the entity discounted the note at 15% with recourse at the bank. The note was paid in full by the maker on maturity. The discounting is accounted for as a conditional sale with recognition of a contingent liability. 1. What amount was received from the note receivable discounting? a. 4,017,000 b. 4,120,000 c. 4,103,000 d. 3,965,500 2. What is the loss on note receivable discounting? а. 40,000 b. 23,000 с. 17,000 d. 20,000

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 3E: Non-Interest-Bearing Notes Payable On November 16, 2019, Clear Glass Company borrowed 20,000 from...

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Concept explainers

Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly.

Question

100%

1. What amount was received from the note receivable discounting?

a. 4,017,000
b. 4,120,000
c. 4,103,000
d. 3,965,500

2. What amount should be reported as loss on note receivable discounting?

a. 40,000
b. 23,000
c. 17,000
d. 20,000

3. An entity accepted from a customer in settlement of an account a P4,000, 000.
90-day 12% note dated August 31, 2019. On September 30, 20119, the entity
discounted the note at 15% with recourse at the bank. The note was paid in full
by the maker on maturity. The discounting is accounted for as a conditional sale
with recognition of a contingent liability.
1. What amount was received from the note receivable discounting?
a. 4,017,000
b. 4,120,000
С. 4,103,000
d. 3,965,500
2. What is the loss on note receivable discounting?
а. 40,000
b. 23,000
с. 17,000
d. 20,000

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