On December 31, 2020, Bart Company purchased a machine in exchange for a noninterest bearing note requiring eight payments of P200,000. The first payment was made on December 31, 2020 and the others are due annually on December 31. At date of issuance, the prevailing rate of interest for this type of note was 11%. PV of an ordinary annuity of 1 at 11% for 8 periods 5.146 PV of an annuity of 1 in advamce at 11% for 8 periods at 5.712 1. What amount should be recorded at initial cost of the machine? 2. What is the discount on note payable on December 31, 2020? 3. What i sthe interest expense for 2021? 4. What is the carrying amount of note payable on December 31, 2021?
On December 31, 2020, Bart Company purchased a machine in exchange for a noninterest bearing note requiring eight payments of P200,000. The first payment was made on December 31, 2020 and the others are due annually on December 31. At date of issuance, the prevailing rate of interest for this type of note was 11%.
PV of an ordinary annuity of 1 at 11% for 8 periods 5.146
PV of an annuity of 1 in advamce at 11% for 8 periods at 5.712
1. What amount should be recorded at initial cost of the machine?
2. What is the discount on note payable on December 31, 2020?
3. What i sthe interest expense for 2021?
4. What is the carrying amount of note payable on December 31, 2021?
i need answers for all 4 questions.
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