On January 1, 2023, ABC Company sold a office equipment with a cost of P5,400,000 and accumulated depreciation of P2,980,000. In consideration for the sale, ABC Company received cash of P220,000 and a noninterest-bearing note receivable of P3,500,000 due on December 31, 2026. The prevailing rate of interest for this type of note is 12%. On January 1, 2023, ABC Company sold an old machinery with a cost of P3,000,000 and accumulated depreciation of P2,000,000. In consideration for the sale, ABC Company received cash of P250,000 and a noninterest-bearing note receivable of P1,850,000 due in 5 equal annual installments starting December 31, 2023. The prevailing rate of interest of this type of note is 10%.

On January 1, 2023, ABC Company sold a office equipment with a cost of P5,400,000 and accumulated depreciation of P2,980,000. In consideration for the sale, ABC Company received cash of P220,000 and a noninterest-bearing note receivable of P3,500,000 due on December 31, 2026. The prevailing rate of interest for this type of note is 12%. On January 1, 2023, ABC Company sold an old machinery with a cost of P3,000,000 and accumulated depreciation of P2,000,000. In consideration for the sale, ABC Company received cash of P250,000 and a noninterest-bearing note receivable of P1,850,000 due in 5 equal annual installments starting December 31, 2023. The prevailing rate of interest of this type of note is 10%.

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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