Watson Co. sold some machinery to the Finney Co. on January 2, 2009. The cash selling price would have been P473,850. Finney entered into an installment sales contract which required annual payments of P125,000, including interest at 10% over five years. The first payment was due on December 31, 2009. What amount of interest income should be included in Watson’s 2010 income statement (the second year of the contract)? A 25,845 B 12,524 C 34,885 D 39,624
Watson Co. sold some machinery to the Finney Co. on January 2, 2009. The cash selling price would have been P473,850. Finney entered into an installment sales contract which required annual payments of P125,000, including interest at 10% over five years. The first payment was due on December 31, 2009. What amount of interest income should be included in Watson’s 2010 income statement (the second year of the contract)? A 25,845 B 12,524 C 34,885 D 39,624
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Watson Co. sold some machinery to the Finney Co. on January 2, 2009. The cash selling price would have been P473,850. Finney entered into an installment sales contract which required annual payments of P125,000, including interest at 10% over five years. The first payment was due on December 31, 2009. What amount of interest income should be included in Watson’s 2010 income statement (the second year of the contract)?
A
25,845
B
12,524
C
34,885
D
39,624
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