Pangasinan Company is a dealer in equipment. On December 31, 2017, the entity sold an equipment in exchange for a non-interest bearing note requiring five annual payments of P500,000. The first payment was made on December 31, 2018. The market interest for similar notes was 8%. The PV of 1 at 8% for 5 periods is .68 and the PV of an ordinary annuity of 1 at 8% for 5 periods is 3.99. On December 31, 2017, what is the carrying amount of the note receivable?
Pangasinan Company is a dealer in equipment. On December 31, 2017, the entity sold an equipment in exchange for a non-interest bearing note requiring five annual payments of P500,000. The first payment was made on December 31, 2018. The market interest for similar notes was 8%. The PV of 1 at 8% for 5 periods is .68 and the PV of an ordinary annuity of 1 at 8% for 5 periods is 3.99. On December 31, 2017, what is the carrying amount of the note receivable?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Pangasinan Company is a dealer in equipment. On December 31, 2017, the entity sold an equipment in exchange for a non-interest bearing note requiring five annual payments of P500,000. The first payment was made on December 31, 2018.
The market interest for similar notes was 8%. The PV of 1 at 8% for 5 periods is .68 and the PV of an ordinary annuity of 1 at 8% for 5 periods is 3.99.
On December 31, 2017, what is the carrying amount of the note receivable?
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