Problem 13 On January 1, 2020, Magbaril Company sold equipment with a carrying amount of P800,000 to Macud Company. As payment, Macud gave Magbaril Company a P1,200,000 note. The note bears an interest rate of 5% and is to be repaid in three annual installments of P400,000 (plus interest on the outstanding balance). The first payment was received on December 31, 2020. The prevailing rate of interest for a note of this type at January 1 was 10% and 9% on December 31. The gain on sale of equipment is The interest income to be recognized in 2021 is
Problem 13 On January 1, 2020, Magbaril Company sold equipment with a carrying amount of P800,000 to Macud Company. As payment, Macud gave Magbaril Company a P1,200,000 note. The note bears an interest rate of 5% and is to be repaid in three annual installments of P400,000 (plus interest on the outstanding balance). The first payment was received on December 31, 2020. The prevailing rate of interest for a note of this type at January 1 was 10% and 9% on December 31. The gain on sale of equipment is The interest income to be recognized in 2021 is
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Problem 13
On January 1, 2020, Magbaril Company sold equipment with a carrying amount of P800,000 to Macud Company. As payment, Macud gave Magbaril Company a P1,200,000 note. The note bears an interest rate of 5% and is to be repaid in three annual installments of P400,000 (plus interest on the outstanding balance). The first payment was received on December 31, 2020. The prevailing rate of interest for a note of this type at January 1 was 10% and 9% on December 31.
- The gain on sale of equipment is
- The interest income to be recognized in 2021 is
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