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to record the receipt What should have been the E of note from Company B on October 1, 2020?

to record the receipt What should have been the E of note from Company B on October 1, 2020?

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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J. What should have been the ENTRY to record the receipt of note from Company B on October 1, 2020? 2-2 Notes Receivables The trial balance for BLUE Corporation prepared at December 31, 2020 showed a balance of P4,000,000 for Notes Receivables broken as follows: Notes receivable from Company A 3,000,000 1,000,000 4,000,000 Notes receivable from Company B Total Additional information: The notes receivable from Company A is a three-year non- interest bearing note, with face value of P3,000,000. The note was received in exchange for a piece of land sold by BLUE on May 1, 2020. The land was carried in the books at the date of sale at P2,600,000. The difference between the face amount of the note and the carrying value of the land was credited to gain on sale of land. The market interest rate for a note of this type is 10%. The notes receivable from Company B bears interest at 10%. The note was received from sale of goods in the normal course of business. The note is dated October 1, 2020 and matures on March 31, 2021 No interest revenue has yet been recorded by BLUE during 2020 on any of the notes mentioned above.
Transcribed Image Text:J. What should have been the ENTRY to record the receipt of note from Company B on October 1, 2020? 2-2 Notes Receivables The trial balance for BLUE Corporation prepared at December 31, 2020 showed a balance of P4,000,000 for Notes Receivables broken as follows: Notes receivable from Company A 3,000,000 1,000,000 4,000,000 Notes receivable from Company B Total Additional information: The notes receivable from Company A is a three-year non- interest bearing note, with face value of P3,000,000. The note was received in exchange for a piece of land sold by BLUE on May 1, 2020. The land was carried in the books at the date of sale at P2,600,000. The difference between the face amount of the note and the carrying value of the land was credited to gain on sale of land. The market interest rate for a note of this type is 10%. The notes receivable from Company B bears interest at 10%. The note was received from sale of goods in the normal course of business. The note is dated October 1, 2020 and matures on March 31, 2021 No interest revenue has yet been recorded by BLUE during 2020 on any of the notes mentioned above.
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