On January 1, 2019, Bestbuy Inc. purchased land that had an assessed value of P6,000,000 at the time of purchase. A P9,000,000 non-interest-bearing note due January 1, 2021 was given in exchange. There was no established exchange price for the land, nor a ready market value for the note. The interest rate charged on a note of this type is 12%. The present value of 1 at 12% for 3 periods is 0.7118. The present value of an annuity of 1 at 12 % for 3 periods is 2.4018. In its December 31, 2019 balance sheet, what carrying amount should Bestbuy report as Note payable? a. P7,270,800 c. P8,070,048 b. P7,174,944 d. P9,000,000

On January 1, 2019, Bestbuy Inc. purchased land that had an assessed value of P6,000,000 at the time of purchase. A P9,000,000 non-interest-bearing note due January 1, 2021 was given in exchange. There was no established exchange price for the land, nor a ready market value for the note. The interest rate charged on a note of this type is 12%. The present value of 1 at 12% for 3 periods is 0.7118. The present value of an annuity of 1 at 12 % for 3 periods is 2.4018. In its December 31, 2019 balance sheet, what carrying amount should Bestbuy report as Note payable? a. P7,270,800 c. P8,070,048 b. P7,174,944 d. P9,000,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 10MC: On January 1, 2019, Park Company accepted a 36,000, non-interest-bearing, 3-year note from a major...

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