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Problem 13  On January 1, 2020, Magbaril Company sold equipment with a carrying amount of P800,000 to  Macud Company. As payment, Macud gave Magbaril Company a P1,200,000 note. The note  bears an interest rate of 5% and is to be repaid in three annual installments of P400,000 (plus  interest on the outstanding balance). The first payment was received on December 31, 2020.  The prevailing rate of interest for a note of this type at January 1 was 10% and 9% on  December 31.  The gain on sale of equipment is   The interest income to be recognized in 2021 is

Problem 13  On January 1, 2020, Magbaril Company sold equipment with a carrying amount of P800,000 to  Macud Company. As payment, Macud gave Magbaril Company a P1,200,000 note. The note  bears an interest rate of 5% and is to be repaid in three annual installments of P400,000 (plus  interest on the outstanding balance). The first payment was received on December 31, 2020.  The prevailing rate of interest for a note of this type at January 1 was 10% and 9% on  December 31.  The gain on sale of equipment is   The interest income to be recognized in 2021 is

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter9: Long-term Liabilities
Section: Chapter Questions
Problem 79E
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Problem 13 

On January 1, 2020, Magbaril Company sold equipment with a carrying amount of P800,000 to  Macud Company. As payment, Macud gave Magbaril Company a P1,200,000 note. The note  bears an interest rate of 5% and is to be repaid in three annual installments of P400,000 (plus  interest on the outstanding balance). The first payment was received on December 31, 2020.  The prevailing rate of interest for a note of this type at January 1 was 10% and 9% on  December 31. 

  1. The gain on sale of equipment is  
  2. The interest income to be recognized in 2021 is 
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