On January 1, 20x1, ABC Co. sold a tract of land that was acquired several years ago for ₱2,000,000. ABC Co. received a non-interest bearing note for ₱4,000,000. The note is payable in equal annual installments of ₱500,000 every December 31, starting December 31, 20x1. The market interest for similar note was 16%. (Round present value factors to 2 decimal places.) 1. What is the carrying amount of the note receivable on January 1, 20x1? 2. What amount should be recognized as gain on sale of land in 20x1? 3. What is the carrying amount of the note receivable on December 31, 20x1?
On January 1, 20x1, ABC Co. sold a tract of land that was acquired several years ago for ₱2,000,000. ABC Co. received a non-interest bearing note for ₱4,000,000. The note is payable in equal annual installments of ₱500,000 every December 31, starting December 31, 20x1. The market interest for similar note was 16%. (Round present value factors to 2 decimal places.) 1. What is the carrying amount of the note receivable on January 1, 20x1? 2. What amount should be recognized as gain on sale of land in 20x1? 3. What is the carrying amount of the note receivable on December 31, 20x1?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
On January 1, 20x1, ABC Co. sold a tract of land that was acquired several years ago for ₱2,000,000. ABC
Co. received a non-interest bearing note for ₱4,000,000. The note is payable in equal annual installments of
₱500,000 every December 31, starting December 31, 20x1. The market interest for similar note was 16%.
(Round present value factors to 2 decimal places.)
1. What is the carrying amount of the note receivable on January 1, 20x1?
2. What amount should be recognized as gain on sale of land in 20x1?
3. What is the carrying amount of the note receivable on December 31, 20x1?
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