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FINANCIAL ACCOUNTING
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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с. d. 1,782,000 Problem 6-10 (AICPA Adapted) At the beginning of current year, Jean Company purchased from Carmina Company a P2,000,000, 8%, five-year note that required five equal annual year-end payments of P500,900. e 30, ts of due The note was discounted to yield 9% to Jean Company. At the date of purchase, Jean Company recorded the note at the present value of P1,948,500. 1. What amount of total interest revenue should be recognized by Jean Company over the life of this note? 022? a 504,500 b. 556,000 c. 800,000 d. 900,000 orted able? 2. What amount should be recognized as interest revenue for the current year? a. 175,365 b. 160,000 c. 111,200 d. 180,000 189
Transcribed Image Text:с. d. 1,782,000 Problem 6-10 (AICPA Adapted) At the beginning of current year, Jean Company purchased from Carmina Company a P2,000,000, 8%, five-year note that required five equal annual year-end payments of P500,900. e 30, ts of due The note was discounted to yield 9% to Jean Company. At the date of purchase, Jean Company recorded the note at the present value of P1,948,500. 1. What amount of total interest revenue should be recognized by Jean Company over the life of this note? 022? a 504,500 b. 556,000 c. 800,000 d. 900,000 orted able? 2. What amount should be recognized as interest revenue for the current year? a. 175,365 b. 160,000 c. 111,200 d. 180,000 189
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