On December 31, 2019, Magnet company sold for P 3,000,000 an old equipment having an original cost of P 5,400,000 and carrying amount of P 2,400,000. The term of the sale were P 600,000 down payment and P 800,000 payable each year on December 31of the next three years. The sale agreement made no mention of interest. However, 10% would be a fair rate for this type of transaction, PV of an ordinary annuity of 1 at 10% for 3 years- 2.48685 PV of 1 for years- 0.75132

On December 31, 2019, Magnet company sold for P 3,000,000 an old equipment having an original cost of P 5,400,000 and carrying amount of P 2,400,000. The term of the sale were P 600,000 down payment and P 800,000 payable each year on December 31of the next three years. The sale agreement made no mention of interest. However, 10% would be a fair rate for this type of transaction, PV of an ordinary annuity of 1 at 10% for 3 years- 2.48685 PV of 1 for years- 0.75132

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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