On January 01, 2021, Scottie Boo sold equipment costing P10,000,000 with accumulated depreciation of P5,500,000 in exchange for a P6,000,000 noninterest bearing note due in equal annual installments of P2,000,000 every December 31, 2021. There was no established exchange price for the equipment and the note had no ready market. The prevailing rate of interest for a note of this type at January 01, 2021 was 10%. What is the carrying amount of the note on December 31, 2021? (Round off the present value factors to 4 decimal places)

On January 01, 2021, Scottie Boo sold equipment costing P10,000,000 with accumulated depreciation of P5,500,000 in exchange for a P6,000,000 noninterest bearing note due in equal annual installments of P2,000,000 every December 31, 2021. There was no established exchange price for the equipment and the note had no ready market. The prevailing rate of interest for a note of this type at January 01, 2021 was 10%. What is the carrying amount of the note on December 31, 2021? (Round off the present value factors to 4 decimal places)

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 10MC: On January 1, 2019, Park Company accepted a 36,000, non-interest-bearing, 3-year note from a major...

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