On January 1, 2022. TGIG sold equipment with historical cost of P10,000,000 and accumulated depreciation of P5,500,000 in exchange for a P6,000,000 non-interest bearing note due in annual installments as follows: December 31, 2022 – P3,000,000 December 31, 2023 – P2,000,000 December 31, 2024 – P1,000,000 There was no exchange price for the equipment. The prevailing rate of interest for a note of this type on January 1, 2022 was 10%. (Round off present value factors to four decimal places.)

On January 1, 2022. TGIG sold equipment with historical cost of P10,000,000 and accumulated depreciation of P5,500,000 in exchange for a P6,000,000 non-interest bearing note due in annual installments as follows: December 31, 2022 – P3,000,000 December 31, 2023 – P2,000,000 December 31, 2024 – P1,000,000 There was no exchange price for the equipment. The prevailing rate of interest for a note of this type on January 1, 2022 was 10%. (Round off present value factors to four decimal places.)

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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61. On January 1, 2019, A Company purchased inventory with a list price of P4,400,000 and a cash price of P4,000,000 by issuing a noninterest-bearing note of P4,800,000 due on December 31, 2021. How much is the carrying amount of the note on initial recognition?
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