On July 1, 2021, LIBAGO Company sold a machine costing P500,000 with accumulated depreciation of P380,000 on the date of sale. LIBAGO received as consideration for the sale, a P300,000 non-interest bearing note, due July 1, 2024. There was no established exchange price for the equipment and the note had no ready market. The prevailing rate of interest for a note of this type at July 1, 2021 was 12% and 13% on December 31, 2021. 37. In relation to this transaction, the total income to be recognized in LIBAGO’s 2021 profit or loss is:
On July 1, 2021, LIBAGO Company sold a machine costing P500,000 with accumulated depreciation of P380,000 on the date of sale. LIBAGO received as consideration for the sale, a P300,000 non-interest bearing note, due July 1, 2024. There was no established exchange price for the equipment and the note had no ready market. The prevailing rate of interest for a note of this type at July 1, 2021 was 12% and 13% on December 31, 2021. 37. In relation to this transaction, the total income to be recognized in LIBAGO’s 2021 profit or loss is:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On July 1, 2021, LIBAGO Company sold a machine costing P500,000 with accumulated
depreciation of P380,000 on the date of sale. LIBAGO received as consideration for the
sale, a P300,000 non-interest bearing note, due July 1, 2024. There was no established
exchange price for the equipment and the note had no ready market. The prevailing
rate of interest for a note of this type at July 1, 2021 was 12% and 13% on December
31, 2021.
37. In relation to this transaction, the total income to be recognized in LIBAGO’s 2021
profit or loss is:
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