On January 1, 2021, Roy Company sold a machine with a cost of P500,000 and carrying value of P350,000 to Soy Company. In lieu of cash payment, Soy Company gave Roy a 3-year, P600,000 note. The note is a non-interest bearing note and the prevailing rate of interest for a note of this type is 14% and the principal amount of the note is to be paid in three equal annual installments of P200,000 every December 31. Required: Compute the following: (Round off PV factors to 4 decimal places before multiplying.) 1. Gain or loss on sale of machinery (place parenthesis if loss) Answer 2. Interest income Answer 3. Current portion of the notes receivable Answer
On January 1, 2021, Roy Company sold a machine with a cost of P500,000 and carrying value of P350,000 to Soy Company. In lieu of cash payment, Soy Company gave Roy a 3-year, P600,000 note.
The note is a non-interest bearing note and the prevailing rate of interest for a note of this type is 14% and the principal amount of the note is to be paid in three equal annual installments of P200,000 every December 31.
Required: Compute the following: (Round off PV factors to 4 decimal places before multiplying.)
1. Gain or loss on sale of machinery (place parenthesis if loss)
Answer
2. Interest income
Answer
3. Current portion of the notes receivable
Answer
4. Non current portion of the notes receivable
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