Darryl Company is a dealer in equipment. On January 1, 2008, Darryl Company sold an equipment with a cost of P3,500,000 in exchange for a noninterest bearing note of P5,000,000 requiring a lump sum payment at the end of 5 years. The market interest for similar notes was 8%. The relevant present value factors are:PV of 1 at 8% for 5 periods 0.68PV of an ordinary annuity of 1 at 8% for 5 periods 3.99PV of an annuity due of 1 at 8% for 5 periods 4.31 .What is the interest income to be recognized for the year ended December 31, 2008?

Darryl Company is a dealer in equipment. On January 1, 2008, Darryl Company sold an equipment with a cost of P3,500,000 in exchange for a noninterest bearing note of P5,000,000 requiring a lump sum payment at the end of 5 years. The market interest for similar notes was 8%. The relevant present value factors are:PV of 1 at 8% for 5 periods 0.68PV of an ordinary annuity of 1 at 8% for 5 periods 3.99PV of an annuity due of 1 at 8% for 5 periods 4.31 .What is the interest income to be recognized for the year ended December 31, 2008?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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