interest income
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
On December 31, 2021 Mickey Mouse Corporation has been experiencing financial difficulty due to pandemic. Minnie Mouse Corporation had a Note Receivable from Mickey Mouse Corporation amounting to P5,000,000 which bears an interest of 10%. It also has an accrued interest of P500,000. Mickey Mouse Corporation and Minnie Mouse had an agreement to modify the notes. The following is the modification terms.
- Reduction of Principal to P4,000,000
- Reduction of interest to 8% payable annually beginning December 2022.
- Principal payment is was reset to be paid on December 31, 2023.
How much is the interest income on December 31, 2022?
choices:
386,004
393,956
320,000
300,000
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