On January 1, 2020, Jonathan Company borrowed P500,000 8% note due in four years. The present value of the note on the date of issuance was P367,500.The entity elected irrevocably the fair value option in measuring the note payable. On December 31, 2020, the fair value of the note is P408,150What is the carrying amount of the note payable on December 31, 2020?500,000367,500408,150460,000What amount should be reported as interest expense for 2020?40,00029,40032,56220,000What amount of gain from change in fair value of the note payable should be reported for 2020?135,500172,50091,85029,400At what amount should the discount on note payable be presented on December 31, 2020?132,500103,10091,8500

●1.What is the carrying amount of the note payable on December 31, 2020? Answer: Option 3: 408,150…

Answered: On January 1, 2020, Jonathan Company…

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ISBN:9781259964947

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Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

On January 1, 2020, Jonathan Company borrowed P500,000 8% note due in four years. The present value of the note on the date of issuance was P367,500.

The entity elected irrevocably the fair value option in measuring the note payable. On December 31, 2020, the fair value of the note is P408,150

What is the carrying amount of the note payable on December 31, 2020?
500,000
367,500
408,150
460,000
What amount should be reported as interest expense for 2020?
40,000
29,400
32,562
20,000
What amount of gain from change in fair value of the note payable should be reported for 2020?
135,500
172,500
91,850
29,400
At what amount should the discount on note payable be presented on December 31, 2020?
132,500
103,100
91,850
0