Company A reported a 10% Serial Notes Payable in its December 31, 2019 Statement of Financial Position in the amount of P5,000,000. The note was as a result of a P5,000,000 loan from BPI on June 30, 2019. The loan proceeds amounting to P5,000,000 was debited to Cash and credited to Notes payable. The loan is payable at the rate of P1,000,000 plus interest every June 30 starting 2020. The first principal and interest payment were made in June 30 of the current year, 2020. What is the correct interest expense on the serial notes payable for 2020? a. 400,000 b. 450,000 c. 500,000 d. 550,000
Company A reported a 10% Serial Notes Payable in its December 31, 2019 Statement of Financial Position in the amount of P5,000,000. The note was as a result of a P5,000,000 loan from BPI on June 30, 2019. The loan proceeds amounting to P5,000,000 was debited to Cash and credited to Notes payable. The loan is payable at the rate of P1,000,000 plus interest every June 30 starting 2020. The first principal and interest payment were made in June 30 of the current year, 2020. What is the correct interest expense on the serial notes payable for 2020? a. 400,000 b. 450,000 c. 500,000 d. 550,000
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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Company A reported a 10% Serial Notes Payable in its December 31, 2019 Statement of
Financial Position in the amount of P5,000,000. The note was as a result of a P5,000,000 loan from BPI on June 30, 2019. The loan proceeds amounting to P5,000,000 was debited to Cash and credited to Notes payable. The loan is payable at the rate of P1,000,000 plus interest every June 30 starting 2020. The first principal and interest payment were made in June 30 of the current year, 2020.
What is the correct interest expense on the serial notes payable for 2020?
a. 400,000
b. 450,000
c. 500,000
d. 550,000
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