On January 1, 20x8, JINX Corp. purchased land by issuing P1 million non-interest bearing note payable after 3 years. The company also purchased an equipment by issuing a non-interest promissory note that requires three annual installment payments of P100,000 every December 31. The interest rate charged on the notes is 10%. The present value of P1 at 10% for 3 periods is 0.75131 while the present value of an ordinary annuity of P1 at 10% for 3 periods is 2.4868. 1. What is the carrying value of the P300,000 face value note at December 31, 20x8? 2. What is the carrying value of the P1 million face value note at December 31, 20x9?

On January 1, 20x8, JINX Corp. purchased land by issuing P1 million non-interest bearing note payable after 3 years. The company also purchased an equipment by issuing a non-interest promissory note that requires three annual installment payments of P100,000 every December 31. The interest rate charged on the notes is 10%. The present value of P1 at 10% for 3 periods is 0.75131 while the present value of an ordinary annuity of P1 at 10% for 3 periods is 2.4868. 1. What is the carrying value of the P300,000 face value note at December 31, 20x8? 2. What is the carrying value of the P1 million face value note at December 31, 20x9?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 15RE: On January 1, Kilgore Inc. accepts a 20,000 non-interest-bearing, 5-year note from Dieland Company...

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TRUE/ FALSE