On January 1, 2019, DEXTER Company sold equipment with a carrying amount of P4,800,000 in exchange for a P6,000,000 non-interest bearing note due January 1, 2022. There was no established exchange price for the equipment. The prevailing rate of interest for a note of this type on January 1, 2019 was 10%. 1. What amount should be reported as gain or loss on sale of equipment? 2. What amount should be reported as interest income for 2019?

On January 1, 2019, DEXTER Company sold equipment with a carrying amount of P4,800,000 in exchange for a P6,000,000 non-interest bearing note due January 1, 2022. There was no established exchange price for the equipment. The prevailing rate of interest for a note of this type on January 1, 2019 was 10%. 1. What amount should be reported as gain or loss on sale of equipment? 2. What amount should be reported as interest income for 2019?

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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