In a NutshellProblem 21On December 31,2019, Innovation Company sold a machinery costing P5,200,000 which hada carrying amount of P2,200,000 for P3,000,000. The terms of the sales were P600,000 downpayment and P1,200,000 payable on December 31 of the next two years.The sale agreement made no mention of interest. However, 9% would be a fair rate for thistype of transaction. The present value of an ordinary annuity of 1 at 9% for two years is 1.76.Required:1. Prepare journal entries for 2019, 2020 and 2021.2. Determine the carrying amount of the note receivable on December 31,2019, December31,2020 and December 31,20213. Determine the interest income for 2019,2020 and 2021.

These are the accounting transactions that are having a monetary impact on the financial statement…

On December 31,2019, Innovation Company sold a machinery costing P5,200,000 whicl a carrying amount of P2,200,000 for P3,000,000. The terms of the sales were P600,000- payment and P1,200,000 payable on December 31 of the next two years. The sale agreement made no mention of interest. However, 9% would be a fair rate fo

On December 31,2019, Innovation Company sold a machinery costing P5,200,000 whicl a carrying amount of P2,200,000 for P3,000,000. The terms of the sales were P600,000- payment and P1,200,000 payable on December 31 of the next two years. The sale agreement made no mention of interest. However, 9% would be a fair rate fo

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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