On January 1, 2021, Chua Company purchased a piece of equipment with a list price of P6.000.000. The contract stipulates that Chua pays a down payment of P2,000,000 with the balance due in ten equal semi-annual installments of P518,018 on June 30 and December 31. At the time of purchase, the prevailing interest rate on such contracts was 10%. How much would be debited as equipment? a. P4,000,000 b. P5.180.000 c. P6,000,000 d. P6,180,183
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- On January 1, 2021, Dreamlover Corporation purchased equipment from Daydream Company for P3,600,000. Term of payments includes issuing a 5-year noninterest-bearing note payable equally every end of the year. The effective interest rate is 15%. The entity used 2 decimal places for the PVF. Requirements: How much is the initial cost of the equipment?On September 1, 2021, Confused Company purchased a machine. The purchase agreement required Confuse to pay an initial fee payment of P700,000 plus four P300,000 payments due every four (4) months, the first payment due December 31, 2021. The market interest rate is 12%. The present and future value tables at 4% for four (4) periods were as follows: Present value of P 1, 0.85; Present value of an ordinary annuity of P1, 3.63; Future value of P 1, 1.17, Future value of an ordinary annuity of P1, 4.25. What is the fair value of the note on December 31, 2021?On July 01, 2022, Honesty Corporation sold a set of washing machine and a dryer for a total contract price of P200,000. The stand-alone selling prices of the washing machine and the dryer if sold separately are: 150,000 and 70,000, respectively. A 20% down payment was made and the balance is payable in six (6) equal installment payments of P28,564, inclusive of 2% interest, payable quarterly starting September 30 and December 31, 2022. How much is the total amount of interest earned in 2022? P3,200 P3,794.67 P5,892.72 P6,400
- Teari Company purchased a machine on September 1, 2021. The purchase agreement required Teari to pay an initial fee payment of P700,000 plus four P300,000 payments due every four (4) months, the first payment due December 31, 2021. The market interest rate is 12%. The present and future value tables at 4% for four (4) periods were as follows: Present value of P 1, 0.85; Present value of an ordinary annuity of P1, 3.63; Future value of P 1, 1.17, Future value of an ordinary annuity of P1, 4.25. What is the fair value of the note on December 31, 2021.On July 01, 2021, Emerald Corporation sold a set of washing machine and a dryer for a total contract price of P200,000. The stand-alone selling prices of the washing machine and the dryer if sold separately are: 150,000 and 70,000, respectively. A 20% down payment was made and the balance is payable in six (6) equal installment payments of P28,564, inclusive of 2% interest, payable quarterly starting September 30 and December 31, 2021. How much is the total amount of interest earned in 2021?On July 1, 2021, Emerald Corporation sold a set of washing machine and a dryer for a total contract price of P200,000. The stand alone selling prices of the washing machine and the dryer if sold separately are: 150,000 and 70,000, respectively. A 20% down payment was made and the balance is payable in six (6) equal installment payments of P28,564, inclusive of 2% interest, payable quarterly starting September 30 and December 31, 2021. How much is the revenue to be recognized on this contract on July 1, 2021? 189,362 211,384 200,000 220,000
- On July 1, 2021, Emerald Corporation sold a set of washing machine and a dryer for a total contract price of P200,000. The stand alone selling prices of the washing machine and the dryer if sold separately are: 150,000 and 70,000, respectively. A 20% down payment was made and the balance is payable in six (6) equal installment payments of P28,564, inclusive of 2% interest, payable quarterly starting September 30 and December 31, 2021. How much is the total amount of interest earned in 2021?Kaku Company is a dealer in equipment. On December 31, 2019, the entity sold an equipment in exchange for a noninterest bearing note requiring five annual payments of P500,000. The first payment was made on December 31, 2020. The market interest for similar notes was 8%. The relevant present value factors were: PV of 1 at 8% for 5 periods0.68 PV of an ordinary annuity of 1 at 8% for 5 periods3.99 REQUIRED: Prepare journal entries for 2019 and 2020. Determine the carrying amount of the note receivable on December 31, 2020. Determine the interest income for 2021.On January 1, 2021, Glanville Company sold goods to Otter Corporation. Otter signed an installment note requiring payment of $21,500 annually for five years. The first payment was made on January 1, 2021. The prevailing rate of interest for this type of note at date of issuance was 10%. Glanville should record sales revenue in January 2021 of: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Multiple Choice $107,500 $81,502 $89,652 None of these answer choices are correct.
- Explosib, Inc. acquired two units of equipment on December 31, 2021. The first equipment was purchased in exchange for a ten-year non-interest bearing note requiring annual payment of P1,000,000 every December 31 starting December 31, 2022. The second equipment was acquired by issuing a two-year P6,000,000 non-interest bearing note. The prevailing rate for notes of these types on December 31, 2021 was 12%. What is the total cost of the two units of equipment? Present value factor round to two (2) decimal placesA. 10,130,000 B. 10,450,000 C. 11,130,000 D. 16,470,000 On July 1, 2021, Bulkeyno Inc. exchanged machine with Mawnteyn Company. Bulkeyno’s cost to the machine was P576,000 with related accumulated depreciation of P270,000. Its fair market value was P54,000 higher than its book value. Mawnteyn, on the other hand purchased the machine for P660,000. Carrying value as of the date of exchange was P348,000. Bulkeyno paid Mawnteyn P90,000 for the difference in fair values of the two…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. 15. The gain on sale of equipment is 16. The interest income to be recognized in 2021 isOn December 31, 2021, Chang Company sold a machine in the ordinary course of business to Door Company in exchange for a noninterest bearing note requiring ten annual payments of P1,000,000. The entity made the first payment on December 31, 2021. The market interest rate for similar notes at date of issuance was 8%. PV of an ordinary annuity of 1 at 8% for 9 periods 6.25 PV of an ordinary annuity of 1 at 8% for 10 periods 6.71 4. What is the carrying amount of the note receivable on December 31, 2022? a. 8,000,000 b. 6,750,000 с. 5,250,000 d. 5,750,000