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On January 01, 2021, Scottie Boo sold equipment costing P10,000,000 with accumulated depreciation of P5,500,000 in exchange for a P6,000,000 noninterest bearing note due in equal annual installments of P2,000,000 every December 31, 2021. There was no established exchange price for the equipment and the note had no ready market.  The prevailing rate of interest for a note of this type at January 01, 2021 was 10%.    What is the carrying amount of the note on December 31, 2021? (Round off the present value factors to 4 decimal places)

On January 01, 2021, Scottie Boo sold equipment costing P10,000,000 with accumulated depreciation of P5,500,000 in exchange for a P6,000,000 noninterest bearing note due in equal annual installments of P2,000,000 every December 31, 2021. There was no established exchange price for the equipment and the note had no ready market.  The prevailing rate of interest for a note of this type at January 01, 2021 was 10%.    What is the carrying amount of the note on December 31, 2021? (Round off the present value factors to 4 decimal places)

FINANCIAL ACCOUNTING
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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On January 01, 2021, Scottie Boo sold equipment costing P10,000,000 with accumulated depreciation of P5,500,000 in exchange for a P6,000,000 noninterest bearing note due in equal annual installments of P2,000,000 every December 31, 2021. There was no established exchange price for the equipment and the note had no ready market.  The prevailing rate of interest for a note of this type at January 01, 2021 was 10%. 

 
What is the carrying amount of the note on December 31, 2021? (Round off the present value factors to 4 decimal places)

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