On December 31, 2021, Chang Company sold a machihe in the ordinary course of business to Door Company in exchange for a noninterest bearing note requiring ten annual payments of P1,000,000. The entity made the first payment on December 31, 2021. The market interest rate for similar notes at date of issuance was 8%. PV of an ordinary annuity of 1 at 8% for 9 periods PV of an ordinary annuity of 1 at 8% for 10 periods 6.25 6.71 1. What amount should be reported as sales revenue? a. 7,250,000 b. 5,000,000 c. 6,250,000 d. 8,000,000 2. On December 31, 2021, what is the carrying amount of the note receivable? a. 4,500,000 b. 4,600,000 c. 6,250,000 d. 6,710,000 3. What amount should be reported as interest income for 2022? a. 580,000 b. 720,000 с. 500,000 d. 625,000

On December 31, 2021, Chang Company sold a machihe in the ordinary course of business to Door Company in exchange for a noninterest bearing note requiring ten annual payments of P1,000,000. The entity made the first payment on December 31, 2021. The market interest rate for similar notes at date of issuance was 8%. PV of an ordinary annuity of 1 at 8% for 9 periods PV of an ordinary annuity of 1 at 8% for 10 periods 6.25 6.71 1. What amount should be reported as sales revenue? a. 7,250,000 b. 5,000,000 c. 6,250,000 d. 8,000,000 2. On December 31, 2021, what is the carrying amount of the note receivable? a. 4,500,000 b. 4,600,000 c. 6,250,000 d. 6,710,000 3. What amount should be reported as interest income for 2022? a. 580,000 b. 720,000 с. 500,000 d. 625,000

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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