January 1, 200A, ABC Company sells to XYZ, a used transportation equipment, which was acquired at P800,000, 5 years ago. The carrying value of the equipment is P400,000. There is no established selling price for the equipment. Upon executing the sale, ABC received P100,000 down payment and an 11% 3 year promissory note amounting to P450,000, when the interest rate prevailing in the market is 10%. The initial amount of the note receivable is (Round off the resulting present value of the note to the nearest hundreds.)

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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. On January 1, 200A, ABC Company sells to XYZ, a used transportation equipment, which was acquired at P800,000, 5 years ago. The carrying value of the equipment is P400,000. There is no established selling price for the equipment. Upon executing the sale, ABC received P100,000 down payment and an 11% 3 year promissory note amounting to P450,000, when the interest rate prevailing in the market is 10%.

The initial amount of the note receivable is (Round off the resulting present value of the note to the nearest hundreds.)

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