XYZ Company is a dealer of equipment. On January 1 2020, the entity sold an equipment in exchange for non-interest bearing note requiring three annual payments of P500,000. The first payment was made on December 31, 202
XYZ Company is a dealer of equipment. On January 1 2020, the entity sold an equipment in exchange for non-interest bearing note requiring three annual payments of P500,000. The first payment was made on December 31, 2020.
The market interest rate for similar notes was 9%
|
PV of 1 at 9% for 3 periods |
0.772183 |
|
PV of an ordinary annuity of 1 at 9% for 3 periods |
2.531295 |
Required:
a. Complete the amortization table
|
Date |
Annual Collection |
Interest Income |
Principal |
Present Value |
|
Jan 1, 2020 |
1,265,647.33 |
|||
|
Dec. 31 2020 |
_____________ |
_____________ |
_________ |
___________ |
|
Dec. 31 2021 |
_____________ |
_____________ |
__________ |
___________ |
|
Dec. 31 2022 |
______________ |
_____________ |
__________ |
0.00 |
b. Provide the
c. Provide the journal entries to record the first installment collection on December 31, 2020.
d. Provide the journal entries to record the interest income on December 31, 2021.
e. Provide the journal entries to record the last installment on December 31, 2022.
please provide a clear solution on this one 'casue I badly need to understand this. Thank you.
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