On January 1, 2022, State Co. sold an equipment to Nation Co. The latter issued a five-year P500,000, 10% note to State Co. The note requires interest to be paid annually every December 31 starting December 31, 2022 until the maturity of the note on December 31, 2026. The equipment has a cost of P1,000,000 and accumulated depreciation as of January 1, 2022 of P550,000. The prevailing interest rate for a note of this type is 12%What amount should be reported as gain (loss) on sale of equipment? (Round off PV factors to four decimal places.) O 13,940 gain O 13,940 loss O 50,000 gain O 50,000 loss Answer not given

On January 1, 2022, State Co. sold an equipment to Nation Co. The latter issued a five-year P500,000, 10% note to State Co. The note requires interest to be paid annually every December 31 starting December 31, 2022 until the maturity of the note on December 31, 2026. The equipment has a cost of P1,000,000 and accumulated depreciation as of January 1, 2022 of P550,000. The prevailing interest rate for a note of this type is 12%What amount should be reported as gain (loss) on sale of equipment? (Round off PV factors to four decimal places.) O 13,940 gain O 13,940 loss O 50,000 gain O 50,000 loss Answer not given

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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Question

On January 1, 2022, State Co. sold an equipment to Nation Co. The latter
issued a five-year P500,000, 10% note to State Co. The note requires
interest to be paid annually every December 31 starting December 31,
2022 until the maturity of the note on December 31, 2026. The equipment
has a cost of P1,000,000 and accumulated depreciation as of January 1,
2022 of P550,000. The prevailing interest rate for a note of this type is
12%What amount should be reported as gain (loss) on sale of equipment?
(Round off PV factors to four decimal places.)
O 13,940 gain
13,940 loss
50,000 gain
O 50,000 loss
O Answer not given

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