The initial amount of the note receivable is (Round off the resulting present value of the note to the nearest hundreds.)
The initial amount of the note receivable is (Round off the resulting present value of the note to the nearest hundreds.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 200A, ABC Company sells to XYZ, a used transportation equipment, which was acquired at P800,000, 5 years ago. The carrying value of the equipment is P500,000. There is no established selling price for the equipment. Upon executing the sale, ABC received P100,000 down payment and a 12% promissory note which gives the holder the right to collect 150,000 annually starting December 200A until December 200C, when the interest rate prevailing in the market is 13%.
The initial amount of the note receivable is (Round off the resulting present value of the note to the nearest hundreds.)
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