On January 1, 2014, Mill Company sold a building and received as consideration P 1,000,000 cash and a P 4,000,000 noninterest bearing note due on January 1, 2017. There was no established exchange price for the building and the note had no ready market. The prevailing rate of interest for a note of this type on January 1, 2014 was 10%. The present value of 1 at 10% for three periods is 0.75. What amount of interest revenue should be included in the 2015 income statement?

On January 1, 2014, Mill Company sold a building and received as consideration P 1,000,000 cash and a P 4,000,000 noninterest bearing note due on January 1, 2017. There was no established exchange price for the building and the note had no ready market. The prevailing rate of interest for a note of this type on January 1, 2014 was 10%. The present value of 1 at 10% for three periods is 0.75. What amount of interest revenue should be included in the 2015 income statement?

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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