Compute for the carrying value of the note on January

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Problem - On January 1, 20x9, Fairness Company sold a tract of land that was acquired years ago for P 3M. Fairness received a three year 15% interest bearing note for P 6M in exchange for the land, but the current market rate of interest for comparable notes is 10%. The note is payable in equal annual instalments of P 2M every December 31 starting December 31, 20x9. (Do not round your present factors but round off your final answers to 2 decimal places)

Required -

a. Compute for the carrying value of the note on January 1, 20x9.

b. Compute for the gain or loss on sale.

c. Compute for the interest income recognized in 20x11.

d. Compute for the carrying value of the note in December 31, 20x10.

e. Prepare all entries.

Reference no: EM132984459

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