On January 1, 2020, Lily Co. sold machinery with historical cost of P6,000,000 and accumulated depreciation of P2,500,000 in exchange for a 3-year, 6%, P3,000,000 note receivable. Principal is due January 1, 2023 but interests are due semi-annually every December 31. The effective interest rate for this type of note is 10%. How much is the interest income in 2022?

On January 1, 2020, Lily Co. sold machinery with historical cost of P6,000,000 and accumulated depreciation of P2,500,000 in exchange for a 3-year, 6%, P3,000,000 note receivable. Principal is due January 1, 2023 but interests are due semi-annually every December 31. The effective interest rate for this type of note is 10%. How much is the interest income in 2022?

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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