On January 1, 20x1, ABC sold a used vehicle with a historical cost of P2,000,0000 and accumulated depreciation of P700,000 in exchange for cash of P100,000 and a noninterest bearing note receivable of P1,000,000 due in 4 equal annual installments starting on December 31, 20x1 and every December 31, thereafter. The prevailing rate of interest for this type of note is 12%. On December 31, 20x3, the current portion of the note receivable is approximately (use 6-decimal present value factor)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

15. On January 1, 20x1, ABC sold a used vehicle with a historical cost of P2,000,0000 and accumulated depreciation of P700,000 in exchange for cash of P100,000 and a noninterest bearing note receivable of P1,000,000 due in 4 equal annual installments starting on December 31, 20x1 and every December 31, thereafter. The prevailing rate of interest for this type of note is 12%. On December 31, 20x3, the current portion of the note receivable is approximately (use 6-decimal present value factor)

Expert Solution
steps

Step by step

Solved in 4 steps

Blurred answer
Knowledge Booster
Accounting for Notes
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education