On January 1, 20x1, Otters Co. received a 3-year, noninterest bearing note of P1,200,000 in exchange for equipment with historical cost of P2,000,000 and accumulated depreciation of P700,000. The note is due three equal annual installations beginning on January 1, 20x1 and every January 1 thereafter. The effective interest rate is 10% Requirements: a. Prepare the amortization table. b. How much is the interest income in 20x1? c. How much is the carrying amount of the receivable on Dec. 31, 20x1?

On January 1, 20x1, Otters Co. received a 3-year, noninterest bearing note of P1,200,000 in exchange for equipment with historical cost of P2,000,000 and accumulated depreciation of P700,000. The note is due three equal annual installations beginning on January 1, 20x1 and every January 1 thereafter. The effective interest rate is 10% Requirements: a. Prepare the amortization table. b. How much is the interest income in 20x1? c. How much is the carrying amount of the receivable on Dec. 31, 20x1?

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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