Problem 9: Use the following information for the next five questions: On January 1, 2021, PITIFUL Co. sold transportation equipment with a historical cost of P8,000,000 and accumulated depreciation of P2,800,000. In consideration for the sale, PITIFUL Co. received cash of P400,000 and a noninterest-bearing note receivable of P4,000,000 due in 4 equal annual installments starting December 31, 2021. The prevailing rate of interest of this type of note is 12%. 24. How much is the carying amount of the note on initial recognition? 25. How much is the interest income for 2021? 26. How much is the carrying amount of the note on December 31, 2021?

Problem 9: Use the following information for the next five questions: On January 1, 2021, PITIFUL Co. sold transportation equipment with a historical cost of P8,000,000 and accumulated depreciation of P2,800,000. In consideration for the sale, PITIFUL Co. received cash of P400,000 and a noninterest-bearing note receivable of P4,000,000 due in 4 equal annual installments starting December 31, 2021. The prevailing rate of interest of this type of note is 12%. 24. How much is the carying amount of the note on initial recognition? 25. How much is the interest income for 2021? 26. How much is the carrying amount of the note on December 31, 2021?

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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Problem 6: Carmen Corporation uses the installment sales method. On January 1, 2020, The corporation sold an equipment for P2,000,000 with the following terms: 30% down payment on the date of sale and the balance is payable in four equal annual installments every December 31. The cost of the equipment is P1,200,000. Ignore the concept of time value of money. Requirement: Provide the journal entries for 2020 and 2021. Show all computations in good form.
what is the carrying amount of the note as pf December 31,2022?
5
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