GREENTREE COMPANY acquires a new manufacturing equipment on January 1, 20x6, on instalment basis. The deferred payment contract provides for a down payment of P300,000 and an 8-year note for P3,104,160. The note is to be paid in 8 equal annual instalment payments of P388,020, including 10% interest. The payments are to be made on December 31 of each year, beginning December 31, 20x6. The equipment has a cash price equivalent of P2,370,000. GREENTREE’s financial year-end is December 31. Determine the amount of interest expense to be recognized in 20x6. Your answer GREENTREE COMPANY acquires a new manufacturing equipment on January 1, 20x6, on instalment basis. The deferred payment contract provides for a down payment of P300,000 and an 8-year note for P3,104,160. The note is to be paid in 8 equal annual instalment payments of P388,020, including 10% interest. The payments are to be made on December 31 of each year, beginning December 31, 20x6. The equipment has a cash price equfivalent of P2,370,000. GREENTREE’s financial year-end is December 31. Determine the carrying value of note payable at December 31, 2017. Your answer An entity has an outstanding bond payable amounting to P2,500,000 with accrued interest of P250,000. To settle this debt, the entity issued 1,000, P1,000 par value shares, currently selling at P2,250 per share. The bonds have a current fair value of P3,150,000. Determine the gain or (loss) on extinguishment of debt. Your answer An entity has an outstanding bond payable amounting to P2,500,000 with accrued interst of P250,000. To settle this debt, the entity issued 1,000, P1,000 par value shares, currently selling at P2,250 per share. The bonds have a current fair value of P3,150,000. Determine the increase in the entity’s stockholders’ equity
GREENTREE COMPANY acquires a new manufacturing equipment on January 1, 20x6, on instalment basis. The deferred payment contract provides for a down payment of P300,000 and an 8-year note for P3,104,160. The note is to be paid in 8 equal annual instalment payments of P388,020, including 10% interest. The payments are to be made on December 31 of each year, beginning December 31, 20x6. The equipment has a cash price equivalent of P2,370,000. GREENTREE’s financial year-end is December 31. Determine the amount of interest expense to be recognized in 20x6.
Your answer
GREENTREE COMPANY acquires a new manufacturing equipment on January 1, 20x6, on instalment basis. The deferred payment contract provides for a down payment of P300,000 and an 8-year note for P3,104,160. The note is to be paid in 8 equal annual instalment payments of P388,020, including 10% interest. The payments are to be made on December 31 of each year, beginning December 31, 20x6. The equipment has a cash price equfivalent of P2,370,000. GREENTREE’s financial year-end is December 31. Determine the carrying value of note payable at December 31, 2017.
Your answer
An entity has an outstanding bond payable amounting to P2,500,000 with accrued interest of P250,000. To settle this debt, the entity issued 1,000, P1,000 par value shares, currently selling at P2,250 per share. The bonds have a current fair value of P3,150,000. Determine the gain or (loss) on extinguishment of debt.
Your answer
An entity has an outstanding bond payable amounting to P2,500,000 with accrued interst of P250,000. To settle this debt, the entity issued 1,000, P1,000 par value shares, currently selling at P2,250 per share. The bonds have a current fair value of P3,150,000. Determine the increase in the entity’s
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