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 journal entries to record the sale of equipment on January 1, 2020. 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.
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 EVERY LETTER'casue I badly need to understand this. Thank you.
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