Determine what is gain on derecognition of note payable

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Reference no: EM132728786

On january 1 20x1 an entity has oustanding note payable with carrying amount of P 1,000,000.

Problem 1: On this date, the debtor agrees to receive equipment with historical cost of 1,800,000, accumulated depreciation of P 900,000 and fair Value of P 850,000 in full settlement of the note payable.

A. What is the gain or loss on the derecognition of note payable?

Problem 2: On this day, the debtor agrees to receive 10,000 shares of the entity with par value per share of P10 in full settlement of the note payable. the shares are currently selling at P75 per shares.

A. What is the gain or loss on the derecognition of the note payable?

B. What is the entry to record the decognition of the note payable?

Reference no: EM132728786

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