On January 1, 2020, MP's customer issued a 3 year 8% note, PHP 3,000,000 for services billed to be paid installment, 1,000,000 every December of the year. What is the carrying amount as at December 31, 2020. The prevailing interest rate is 10%

On January 1, 2020, MP's customer issued a 3 year 8% note, PHP 3,000,000 for services billed to be paid installment, 1,000,000 every December of the year. What is the carrying amount as at December 31, 2020. The prevailing interest rate is 10%

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 1PA: On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10%...

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Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

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