On January 1, 2017, Persephone Company sold a piece of transportation equipment with a historical cost of P1,000,000 and accumulated depreciation of P300,000 in exchange for cash of P100,000 and a noninterest-bearing note receivable of P800,000 due on January 1, 2020. The prevailing rate of interest for this type of note is 12%. How much is the interest income in 2017?

On January 1, 2017, Persephone Company sold a piece of transportation equipment with a historical cost of P1,000,000 and accumulated depreciation of P300,000 in exchange for cash of P100,000 and a noninterest-bearing note receivable of P800,000 due on January 1, 2020. The prevailing rate of interest for this type of note is 12%. How much is the interest income in 2017?

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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Question

On January 1, 2017, Persephone Company sold a piece of transportation equipment with a
historical cost of P1,000,000 and accumulated depreciation of P300,000 in exchange for cash
of P100,000 and a noninterest-bearing note receivable of P800,000 due on January 1, 2020.
The prevailing rate of interest for this type of note is 12%. How much is the interest income in
2017?

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