Reference no: EM132961572

Question - Remarkable Company had the following account balances on January 1, 2020:

Note Receivable from sale of an idle building 7,500,000

Note receivable from an officer 2,000,000

Transactions during the current year and other information relating to the receivables are as follows:

The P7,500,000 note receivables is dated May 1, 2019, bears interest at 9%, and represents the balance of the Remarkable Company received from the sale of its idle building to Solid Company. Principal payments of P2,500,000 plus interest are due annually beginning May 1, 2020.

Solid Company made its first principal and interest payment on May 1, 2020.

The P2,000,000 note receivable is dated December 31, 2017 bears interest at 8%, and is due on December 31, 2022.

The note is due from the president of Remarkable Company. Interest is payable annually on December 31, and all interest payment were made through December 31, 2020.

On July 1, 2020, Remarkable Company sold parcel of land to Boom Company for P4,000,000 under an installment sale contract.

Boom Company made a P1,200,000 cash down payment on July 1, 2020 and signed a 4-year 10% note for the P2,800,000 balance.

The equal annual payments of principal and interest on the note totaled P880,000, payable on July 1 of each year from 2020 through 2024.

The fair value of the land at the date of sale was P4,000,000. The cost of the land was P3,000,000.

Requirements -

1. Determine the amount of notes receivable including accrued interest that should be classified as current asset on December 31, 2020.

2. Determine the amount of notes receivable that should be classified as noncurrent assets on December 31, 2020.