Answered: How much is the latest carrying amount…

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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Question

On January 1, 2020, the office of Everlasting Company was burned to ashes due to a fire incident. All of its accounting records were burned except for a copy of a promissory note it issued which was half burnt. The non-interest-bearing note indicates maturity of the P2,000,000 principal on December 31, 2021. The accountant only remembers that the effective interest rate of the note was 9% but cannot remember when the note was issued.

How much is the latest carrying amount of the note before the fire incident?

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