On December 31, 2021, Farida, Inc. purchased a machine for P2,000,000 – P200,000 upfront cash and a non-interest bearing note requiring 9 payments of P200,000. The first payment was made on December 31, 2021 and the others are due annually on December 31. At the date of issuance, the prevailing rate of interest for this type of note is 11%. 1. The carrying amount of the note payable as of December 31, 2023 is: 2. Assuming the cash price of the equipment is P1,770,000, the discount on note payable as of December 31, 2021 has a balance of: 3. The machine must be initially recorded at:
On December 31, 2021, Farida, Inc. purchased a machine for P2,000,000 – P200,000 upfront cash and a non-interest bearing note requiring 9 payments of P200,000. The first payment was made on December 31, 2021 and the others are due annually on December 31. At the date of issuance, the prevailing rate of interest for this type of note is 11%. 1. The carrying amount of the note payable as of December 31, 2023 is: 2. Assuming the cash price of the equipment is P1,770,000, the discount on note payable as of December 31, 2021 has a balance of: 3. The machine must be initially recorded at:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On December 31, 2021, Farida, Inc. purchased a machine for P2,000,000 – P200,000 upfront cash and a non-interest bearing note requiring 9 payments of P200,000. The first payment was made on December 31, 2021 and the others are due annually on December 31. At the date of issuance, the prevailing rate of interest for this type of note is 11%.
1. The carrying amount of the note payable as of December 31, 2023 is:
2. Assuming the cash price of the equipment is P1,770,000, the discount on note payable as of December 31, 2021 has a balance of:
3. The machine must be initially recorded at:
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