On december 31, 2017, Precious Company sold an equipment with carrying amount of 2,000,000 and received a noninterest-bearing note requiring payment of 500,000 annually for ten years. The first payment is due december 31, 2018 The prevailing rate of interest for this type of note at date of issuance is 12%. What is the carrying amount of the note receivable on December 31, 2017?
On december 31, 2017, Precious Company sold an equipment with carrying amount of 2,000,000 and received a noninterest-bearing note requiring payment of 500,000 annually for ten years. The first payment is due december 31, 2018 The prevailing rate of interest for this type of note at date of issuance is 12%. What is the carrying amount of the note receivable on December 31, 2017?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On december 31, 2017, Precious Company sold an equipment with carrying amount of 2,000,000 and received a noninterest-bearing note requiring payment of 500,000 annually for ten years. The first payment is due december 31, 2018
The prevailing rate of interest for this type of note at date of issuance is 12%.
What is the carrying amount of the note receivable on December 31, 2017?
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