What is the interest income for 2022?Based on preceding data, what is the carrying value of the note receivable on December 31, 2022? On December 31, 2021, AAA Company sold for P3,000,000 an old equipment having an originalcost of P5,400,000 and carrying amount of P2,400,000. The terms of the sale were P600,000down payment and P1,200,000 payable each year on December 31 of the next two years. Thesale agreement made no mention of interest. However, 9% would be a fair rate for this type oftransaction. The present value of an ordinary annuity of 1 at 9% for two years is 1.76.

On sale of equipment with deferred payment the fair value of consideration recognized on the date of…

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What is the interest income for 2022? Based on preceding data, what is the carrying value of the note receivable on December 31, 2022?

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

What is the interest income for 2022?
Based on preceding data, what is the carrying value of the note receivable on December 31, 2022?

On December 31, 2021, AAA Company sold for P3,000,000 an old equipment having an original
cost of P5,400,000 and carrying amount of P2,400,000. The terms of the sale were P600,000
down payment and P1,200,000 payable each year on December 31 of the next two years. The
sale agreement made no mention of interest. However, 9% would be a fair rate for this type of
transaction. The present value of an ordinary annuity of 1 at 9% for two years is 1.76.

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