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On Jan. 1, 20x1, an entity has an outstanding note payable with carrying amount of P 1,000,000. On this date, the debtor agrees to receive the equipment with historical cost of P 1,800,000, accumulated depreciation of P 900,000 and fair value of P 850,000 in full settlement of the note payable. Compute for the gain or loss on the derecognition of the notes payable: a. P 0 b. P 150,000 gain c. P 50,000 loss d. P 100,000 gain

On Jan. 1, 20x1, an entity has an outstanding note payable with carrying amount of P 1,000,000. On this date, the debtor agrees to receive the equipment with historical cost of P 1,800,000, accumulated depreciation of P 900,000 and fair value of P 850,000 in full settlement of the note payable. Compute for the gain or loss on the derecognition of the notes payable: a. P 0 b. P 150,000 gain c. P 50,000 loss d. P 100,000 gain

FINANCIAL ACCOUNTING
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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On Jan. 1, 20x1, an entity has an outstanding note payable with carrying amount of P 1,000,000. On this date, the debtor agrees to receive the equipment with historical cost of P 1,800,000, accumulated depreciation of P 900,000 and fair value of P 850,000 in full settlement of the note payable. Compute for the gain or loss on the derecognition of the notes payable:
a. P 0
b. P 150,000 gain
c. P 50,000 loss
d. P 100,000 gain

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