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Compute how much carrying amount of receivable on december

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On January 1, 20x1, ABC Co. sold transportation equipment with a historical cost of P 12,000,000 and accumulated depreciation of P7,000,000 in exchange for cash of P 100,000 and a noninterest-bearing note receivable of P4,000,000 due in 4 equal annual installments starting on January 1, 20x1 and every January 1 thereafter. The prevailing rate of interest for this type of note is 12%.

Problem 1: How much is the interest income in 20x1?

a. 408,230

b. 278,334

c. 328,964

d. 288,220

Problem 2: How much is the carrying amount of the receivable on December 31, 20x1?

a. 1,690,510

b. 892,857

c. 2,690,051

d. 1,594,388

Reference no: EM132669969

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