On January 1, 2020, Mewtwo Company sold a piece of equipment with a carrying amount of P1,500,000 to Mew Company in exchange for a 10% P2,400,000 note that is due on December 31, 2022, and is payable in equal semi-annual installments plus interest that is based on the face of the note. The effective interest rate of the note is 12%. (Round off present value factors up to four decimal po'nt; only round off up to two decimals the final value) Questions: 1. What is the initial carrying amount of the note? 2. What is the carrying amount of the note as of December 31, 2020? 3. How much Is the interest for the year 2021? 4. At what armount should Mewtwo present its notes receivable as current on the statement of financial position in 2020 year-end?

On January 1, 2020, Mewtwo Company sold a piece of equipment with a carrying amount of P1,500,000 to Mew Company in exchange for a 10% P2,400,000 note that is due on December 31, 2022, and is payable in equal semi-annual installments plus interest that is based on the face of the note. The effective interest rate of the note is 12%. (Round off present value factors up to four decimal po'nt; only round off up to two decimals the final value) Questions: 1. What is the initial carrying amount of the note? 2. What is the carrying amount of the note as of December 31, 2020? 3. How much Is the interest for the year 2021? 4. At what armount should Mewtwo present its notes receivable as current on the statement of financial position in 2020 year-end?

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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