On December 31, 2009, Mill Co. sold construction equipment to Drew, Inc. for P1,800,00. The equipment had a carrying amount of P1,200,000. Drew paid P300,000 cash on December 31, 2009 and signed a P1,500,000 note bearing interest at 10%, payable in five annual installments of P300,00. Mill appropriately accounts for the sale under the installment method. On December 31, 2010, Drew paid P300,000 principal and P150,000 interest. For the year ended December 31, 2010, what total amount of revenue should Mill recognize from the construction equipment sale and financing?

On December 31, 2009, Mill Co. sold construction equipment to Drew, Inc. for P1,800,00. The equipment had a carrying amount of P1,200,000. Drew paid P300,000 cash on December 31, 2009 and signed a P1,500,000 note bearing interest at 10%, payable in five annual installments of P300,00. Mill appropriately accounts for the sale under the installment method. On December 31, 2010, Drew paid P300,000 principal and P150,000 interest. For the year ended December 31, 2010, what total amount of revenue should Mill recognize from the construction equipment sale and financing?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

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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Question

On December 31, 2009, Mill Co. sold
construction equipment to Drew, Inc. for
P1,800,00. The equipment had a carrying
amount of P1,200,000. Drew paid P300,000
cash on December 31, 2009 and signed a
P1,500,000 note bearing interest at 10%,
payable in five annual installments of
P300,00. Mill appropriately accounts for the
sale under the installment method. On
December 31, 2010, Drew paid P300,000
principal and P150,000 interest. For the year
ended December 31, 2010, what total
amount of revenue should Mill recognize
from the construction equipment sale and
financing?

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