On January 1, 2020, Magbaril Company sold equipment with a carrying amount of P800,000 to Macud Company. As payment, Macud gave Magbaril Company a P1,200,000 note. The note bears an interest rate of 5% and is to be repaid in three annual installments of P400,000 (plus interest on the outstanding balance). The first payment was received on December 31, 2020. The prevailing rate of interest for a note of this type at January 1 was 10% and 9% on December 31. 15. The gain on sale of equipment is 16. The interest income to be recognized in 2021 is

On January 1, 2020, Magbaril Company sold equipment with a carrying amount of P800,000 to Macud Company. As payment, Macud gave Magbaril Company a P1,200,000 note. The note bears an interest rate of 5% and is to be repaid in three annual installments of P400,000 (plus interest on the outstanding balance). The first payment was received on December 31, 2020. The prevailing rate of interest for a note of this type at January 1 was 10% and 9% on December 31. 15. The gain on sale of equipment is 16. The interest income to be recognized in 2021 is

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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Chemical Enterprises issues a note in the amount of $156,000 to a customer on January 1, 2018. Terms of the note show a maturity date of 36 months, and an annual interest rate of 8%. What is the accumulated interest entry if 9 months have passed since note establishment?
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On December 31, 2018, Cavite Company sold equipment to Bulacan Company for P380,000. Cavite accepted a 10% note receivable for the entire sales price. This note is payable in two equal installments of P190,000 plus accrued interest on December 31, 2019 and December 31, 2020. On July 1, 2020, Cavite discounted the note at a bank at a discount rate of 12%. Cavite Company's proceeds from the discounted note were A. P196,460 B. P191,330 C. P187,530 D. P183,920
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