January 1, 2021, VKS Corporation sold goods to IntAcc2 Company. IntAcc2 signed a noninterest-bearing note requiring payment of P600,000 annually for seven years. The first payment was made on January 1, 2021. The prevailing rate of interest for this type of note at date of issuance was 10%. · PV of an ordinary annuity of 1 at 10% for 6 period- 4.36 · PV of an ordinary annuity of 1 at 10% for 7 period- 4.87
January 1, 2021, VKS Corporation sold goods to IntAcc2 Company. IntAcc2 signed a noninterest-bearing note requiring payment of P600,000 annually for seven years. The first payment was made on January 1, 2021. The prevailing rate of interest for this type of note at date of issuance was 10%. · PV of an ordinary annuity of 1 at 10% for 6 period- 4.36 · PV of an ordinary annuity of 1 at 10% for 7 period- 4.87
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2021, VKS Corporation sold goods to IntAcc2 Company. IntAcc2 signed a noninterest-bearing note requiring payment of P600,000 annually for seven years. The first payment was made on January 1, 2021.
The prevailing rate of interest for this type of note at date of issuance was 10%.
· PV of an ordinary annuity of 1 at 10% for 6 period- 4.36
· PV of an ordinary annuity of 1 at 10% for 7 period- 4.87
What is the carrying amount of the note receivable on January 1, 2021?
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