On December 31, 2021, MATARLO Company received two P1,000,000 notes receivable from customers in exchange for services rendered. On both notes, interest is calculated on the outstanding principal balance at the annual rate of 3% and payable at maturity. The note from MAGLINTE Company, made under customary trade terms, is due in nine months and the note from MADERSE Company is due in five years. The market interest rate for similar notes on December 31, 2021 was 8%. The compound interest factors to convert future value into present value at 8% follow: Present value of 1 due in nine months, 0.944 and the present value of 1 due in five years is 0.680. 33. What is the total carrying amount of the notes receivable to be presented at the 2021 statement of financial position?
On December 31, 2021, MATARLO Company received two P1,000,000 notes receivable from customers in exchange for services rendered. On both notes, interest is calculated on the outstanding principal balance at the annual rate of 3% and payable at maturity. The note from MAGLINTE Company, made under customary trade terms, is due in nine months and the note from MADERSE Company is due in five years. The market interest rate for similar notes on December 31, 2021 was 8%. The compound interest factors to convert future value into present value at 8% follow: Present value of 1 due in nine months, 0.944 and the present value of 1 due in five years is 0.680. 33. What is the total carrying amount of the notes receivable to be presented at the 2021 statement of financial position?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On December 31, 2021, MATARLO Company received two P1,000,000 notes receivable
from customers in exchange for services rendered. On both notes, interest is calculated
on the outstanding principal balance at the annual rate of 3% and payable at maturity.
The note from MAGLINTE Company, made under customary trade terms, is due in nine
months and the note from MADERSE Company is due in five years. The market interest
rate for similar notes on December 31, 2021 was 8%. The compound interest factors
to convert future value into present value at 8% follow: Present value of 1 due in nine
months, 0.944 and the present value of 1 due in five years is 0.680.
33. What is the total carrying amount of the notes receivable to be presented at the
2021 statement of financial position ?
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