On December 31, 2020, Company sold a machine in the ordinary course of business to Space-X Company in exchange for a non-interest bearing note requiring ten annual payments of P1,000,000. Space-X made the first payment on December 31, 2020 (advance payment). The market interest rate for similar notes at date of issuance was 8%. The present value of an ordinary annuity of 1 at 8% for 9 periods is 6.25, while the present value of an ordinary annuity of 1 at 8% for 10 periods is 6.71. What amount should be reported as interest income for 2021?
On December 31, 2020, Company sold a machine in the ordinary course of business to Space-X Company in exchange for a non-interest bearing note requiring ten annual payments of P1,000,000. Space-X made the first payment on December 31, 2020 (advance payment). The market interest rate for similar notes at date of issuance was 8%. The present value of an ordinary annuity of 1 at 8% for 9 periods is 6.25, while the present value of an ordinary annuity of 1 at 8% for 10 periods is 6.71. What amount should be reported as interest income for 2021?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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On December 31, 2020, Company sold a machine in the ordinary course of business to Space-X Company in exchange for a non-interest bearing note requiring ten annual payments of P1,000,000. Space-X made the first payment on December 31, 2020 (advance payment). The market interest rate for similar notes at date of issuance was 8%.
The
What amount should be reported as interest income for 2021?
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