On January 1, 2012, the Dolce Corporation issued a three-year, non-interest bearing note with face value of P3,000,000 for a piece of land purchased from Jardine Corporation. The note is payable in annual installments of P1,000,000 every December 31, starting on December 31, 2012. The land has an equivalent cash price of P2,400,000, a price that provides the note an effective interest rate of 12%. What is the interest expense for the year ending December 31, 2012? * a. P360,000 b. P288,000 c. P240,000 d. P168,000
On January 1, 2012, the Dolce Corporation issued a three-year, non-interest bearing note with face value of P3,000,000 for a piece of land purchased from Jardine Corporation. The note is payable in annual installments of P1,000,000 every December 31, starting on December 31, 2012. The land has an equivalent cash price of P2,400,000, a price that provides the note an effective interest rate of 12%. What is the interest expense for the year ending December 31, 2012? * a. P360,000 b. P288,000 c. P240,000 d. P168,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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16. On January 1, 2012, the Dolce Corporation issued a three-year, non-interest bearing note with face value of P3,000,000 for a piece of land purchased from Jardine Corporation. The note is payable in annual installments of P1,000,000 every December 31, starting on December 31, 2012. The land has an equivalent cash price of P2,400,000, a price that provides the note an effective interest rate of 12%. What is the interest expense for the year ending December 31, 2012? *
a. P360,000
b. P288,000
c. P240,000
d. P168,000
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