On Dec. 31, 2020, Boss Company purchased a machine from Len Company in exchange for a noninterest bearing note requiring three payments of P 800,000. The first payment was made on Dec. 31, 2020 and the others are due annually on Dec. 31. At the date of issuance, the prevailing interest rate for this note was 10%The PV of an ordinary annuity of 1 at 10% for 3 periods is 2.487 while the PV of an annuity in advance of 1 at 10% for 3 periods is 2.736. On Dec. 31, 2021, what is the carrying amount of the note payable? * a. P 1,388,800 b. P 727,680 c. P 1,388,560 d. P 1,189,600
On Dec. 31, 2020, Boss Company purchased a machine from Len Company in exchange for a noninterest bearing note requiring three payments of P 800,000. The first payment was made on Dec. 31, 2020 and the others are due annually on Dec. 31. At the date of issuance, the prevailing interest rate for this note was 10%The PV of an ordinary annuity of 1 at 10% for 3 periods is 2.487 while the PV of an annuity in advance of 1 at 10% for 3 periods is 2.736. On Dec. 31, 2021, what is the carrying amount of the note payable? * a. P 1,388,800 b. P 727,680 c. P 1,388,560 d. P 1,189,600
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 1PA: On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10%...
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On Dec. 31, 2020, Boss Company purchased a machine from Len Company in exchange for a noninterest bearing note requiring three payments of P 800,000. The first payment was made on Dec. 31, 2020 and the others are due annually on Dec. 31. At the date of issuance, the prevailing interest rate for this note was 10%The PV of an ordinary annuity of 1 at 10% for 3 periods is 2.487 while the PV of an annuity in advance of 1 at 10% for 3 periods is 2.736. On Dec. 31, 2021, what is the carrying amount of the note payable? *
a. P 1,388,800
b. P 727,680
c. P 1,388,560
d. P 1,189,600
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