On January 1, 2020, the office of Everlasting Company was burned to ashes due to a fire incident. All of its accounting records were burned except for a copy of a promissory note it issued which was half burnt. The non-interest-bearing note indicates maturity of the P2,000,000 principal on December 31, 2021. The accountant only remembers that the effective interest rate of the note was 9% but cannot remember when the note was issued. How much is the interest expense for 2020?
On January 1, 2020, the office of Everlasting Company was burned to ashes due to a fire incident. All of its accounting records were burned except for a copy of a promissory note it issued which was half burnt. The non-interest-bearing note indicates maturity of the P2,000,000 principal on December 31, 2021. The accountant only remembers that the effective interest rate of the note was 9% but cannot remember when the note was issued. How much is the interest expense for 2020?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2020, the office of Everlasting Company was burned to ashes due to a fire incident. All of its accounting records were burned except for a copy of a promissory note it issued which was half burnt. The non-interest-bearing note indicates maturity of the P2,000,000 principal on December 31, 2021. The accountant only remembers that the effective interest rate of the note was 9% but cannot remember when the note was issued.
How much is the interest expense for 2020?
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