On 31 December 2017, PC sold used equipment with carrying amount of P2,000,000 in exchange for a non-interest bearing note of P5,000,000 requiring ten annual payments of P500,000. The first payment was mad on 31 December 2018. The market interest for similar note was 12%. (use 2 decimal places for PV factors) What is the carrying amount of the note receivable on 31 December 2017? What is the gain on sale of equipment to be recognized in 2017?
On 31 December 2017, PC sold used equipment with carrying amount of P2,000,000 in exchange for a non-interest bearing note of P5,000,000 requiring ten annual payments of P500,000. The first payment was mad on 31 December 2018. The market interest for similar note was 12%. (use 2 decimal places for PV factors) What is the carrying amount of the note receivable on 31 December 2017? What is the gain on sale of equipment to be recognized in 2017?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On 31 December 2017, PC sold used equipment with carrying amount of P2,000,000 in exchange for a non-interest bearing note of P5,000,000 requiring ten annual payments of P500,000. The first payment was mad on 31 December 2018. The market interest for similar note was 12%. (use 2 decimal places for PV factors)
- What is the carrying amount of the note receivable on 31 December 2017?
- What is the gain on sale of equipment to be recognized in 2017?
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