Ayala Company sold an equipment with a carrying amount of P800,000, receiving a noninterest-bearing note due in three years with a face amount of P1,000,000. There is no established market value for the equipment. The interest rate on similar obligations is estimated at 12%. The present value of 1 at 12% for three periods is .712. What amount should be reported as gain or loss on sale of equipment?
Ayala Company sold an equipment with a carrying amount of P800,000, receiving a noninterest-bearing note due in three years with a face amount of P1,000,000. There is no established market value for the equipment. The interest rate on similar obligations is estimated at 12%. The present value of 1 at 12% for three periods is .712. What amount should be reported as gain or loss on sale of equipment?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Ayala Company sold an equipment with a carrying amount of P800,000, receiving a noninterest-bearing note due in three years with a face amount of P1,000,000. There is no established market value for the equipment.
The interest rate on similar obligations is estimated at 12%. The present value of 1 at 12% for three periods is .712.
What amount should be reported as gain or loss on sale of equipment?
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