Nuggets Company accepted a P400,000 face value, six-month, 10% note dated May 15 from a customer. After holding the note for two months, Nuggets discounted the note without recourse at PRIA Bank at a 12% discount rate and appropriately accounted the discounting as a sale. Accrued interest was appropriately recorded prior to discounting. Question: 41. What was the gain or loss recognized by Nuggets on the sale of notes receivable?
Nuggets Company accepted a P400,000 face value, six-month, 10% note dated May 15 from a customer. After holding the note for two months, Nuggets discounted the note without recourse at PRIA Bank at a 12% discount rate and appropriately accounted the discounting as a sale. Accrued interest was appropriately recorded prior to discounting. Question: 41. What was the gain or loss recognized by Nuggets on the sale of notes receivable?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Nuggets Company accepted a P400,000 face value, six-month, 10% note dated May 15 from a customer. After holding the note for two months, Nuggets discounted the note without recourse at PRIA Bank at a 12% discount rate and appropriately accounted the discounting as a sale. Accrued interest was appropriately recorded prior to discounting.
Question:
41. What was the gain or loss recognized by Nuggets on the sale of notes receivable?
A. P3,466.67 loss
B. P3,466.67 gain
C. P3,200.00 loss
D. P3,200.00 gain
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