On January 1, 2020, Adobo Incorporated sold its aggregate equipment.  The buyer issued a promissory note with a face amount of P10,000,000 and stated interest rate of 6%.  The note is payable in annual installments of P2,000,000 plus accrued interest on the outstanding balance.  The first installment is due on December 31, 2020.  There is no established cash price for this type of aggregate equipment and the note has no ready market. The prevailing interest for a note of this type is 12%.    The aggregate equipment has a cost of P12,000,000 and an accumulated depreciation of P2,600,000 as of January 1, 2020.   What will be the carrying amount of the Notes Receivable as of December 31, 2022? (Use four-decimal places and round off the final answer to the nearest peso.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

On January 1, 2020, Adobo Incorporated sold its aggregate equipment.  The buyer issued a promissory note with a face amount of P10,000,000 and stated interest rate of 6%.  The note is payable in annual installments of P2,000,000 plus accrued interest on the outstanding balance.  The first installment is due on December 31, 2020.  There is no established cash price for this type of aggregate equipment and the note has no ready market. The prevailing interest for a note of this type is 12%.  

 The aggregate equipment has a cost of P12,000,000 and an accumulated depreciation of P2,600,000 as of January 1, 2020.
 
What will be the carrying amount of the Notes Receivable as of December 31, 2022? (Use four-decimal places and round off the final answer to the nearest peso.) 

Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Accounting for Notes
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education