Credulous Company purchased equipment on January 1,2020 under the following terms:The same equipment was available at a cash price ofProblem 23-2 (ACP)uisitionsP200,000 downpaymentb.Five annual payments of P100,000, the first installmentnote to be paid on December 31, 2020.a.ordinaryP120 peralueofP580,000.cementRequired:Prepare journal entries for 2020 and 2021.00 foraluedOn January 1, 2020, Enrich Company purchased a machineunder the following terms:Problem 23-3 (ACP)e ofch itnalb. Four annual payments of P200,000, the first installmenta. P100,000 downpaymentuenote to be paid on December 31, 2020.The fair value of the machine is not clearly determinable onThe prevailing rate of interest for this type of obligation is 10%.The present value factors at 10% for four periods are:isthe date of acquisition..6833.170Present value of 1Present value of ordinary annuity of 1Required:Prepare journal entries for 2020 and 2021.

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Problem 23-2 (ACP) Credulous Company purchased equipment on January 1, 2020 under the following terms: P200,000 dow npayment a. b. .Five annual payments of P100,000, the first installment note to be paid on December 31, 2020. The same equipment was available at a cash price of P580,000.

Problem 23-2 (ACP) Credulous Company purchased equipment on January 1, 2020 under the following terms: P200,000 dow npayment a. b. .Five annual payments of P100,000, the first installment note to be paid on December 31, 2020. The same equipment was available at a cash price of P580,000.

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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Question

Credulous Company purchased equipment on January 1,
2020 under the following terms:
The same equipment was available at a cash price of
Problem 23-2 (ACP)
uisitions
P200,000 downpayment
b.
Five annual payments of P100,000, the first installment
note to be paid on December 31, 2020.
a.
ordinary
P120 per
alue
of
P580,000.
cement
Required:
Prepare journal entries for 2020 and 2021.
00 for
alued
On January 1, 2020, Enrich Company purchased a machine
under the following terms:
Problem 23-3 (ACP)
e of
ch it
nal
b. Four annual payments of P200,000, the first installment
a. P100,000 downpayment
ue
note to be paid on December 31, 2020.
The fair value of the machine is not clearly determinable on
The prevailing rate of interest for this type of obligation is 10%.
The present value factors at 10% for four periods are:
is
the date of acquisition.
.683
3.170
Present value of 1
Present value of ordinary annuity of 1
Required:
Prepare journal entries for 2020 and 2021.

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