On January 1, 20x1, Drive Co, paid cash of P200,000 and issued a noninterest-bearing note P2,000,000 in exchange for a vehicle. The note is due in four equal annual installments. The first installment is due on January 1, 20x1 and the succeeding installments are due every 1 of January. The prevailing rate of interest for this type of note is 12%.

On January 1, 20x1, Drive Co, paid cash of P200,000 and issued a noninterest-bearing note P2,000,000 in exchange for a vehicle. The note is due in four equal annual installments. The first installment is due on January 1, 20x1 and the succeeding installments are due every 1 of January. The prevailing rate of interest for this type of note is 12%.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 16Q: Jain Enterprises honors a short-term note payable. Principal on the note is $425,000, with an annual...

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