On January 1, 2022, Cat Corporation sold goods to Rat Company. Rat Company signed a non- interest-bearing note requiring payment of P600,000 annually for seven years. The first payment was made on January 1, 2022. The prevailing rate of interest for this type of note at date of issuance was 10%. PV of an ordinary annuity of 1 at 10% for 6 periods 4.36 PV of an ordinary annuity of 1 at 10% for 7 periods 4.87 1. What is the amount of Sales Revenue credited on January 1, 2022? 2. What is the carrying amount of note receivable on December 31, 2022?
On January 1, 2022, Cat Corporation sold goods to Rat Company. Rat Company signed a non- interest-bearing note requiring payment of P600,000 annually for seven years. The first payment was made on January 1, 2022. The prevailing rate of interest for this type of note at date of issuance was 10%. PV of an ordinary annuity of 1 at 10% for 6 periods 4.36 PV of an ordinary annuity of 1 at 10% for 7 periods 4.87 1. What is the amount of Sales Revenue credited on January 1, 2022? 2. What is the carrying amount of note receivable on December 31, 2022?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2022, Cat Corporation sold goods to Rat Company. Rat Company signed a non-
interest-bearing note requiring payment of P600,000 annually for seven years. The first payment
was made on January 1, 2022. The prevailing rate of interest for this type of note at date of
issuance was 10%.
PV of an ordinary annuity of 1 at 10% for 6 periods 4.36
PV of an ordinary annuity of 1 at 10% for 7 periods 4.87
1. What is the amount of Sales Revenue credited on January 1, 2022?
2. What is the carrying amount of note receivable on December 31, 2022?
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