Find how much is carrying amount of the noncurrent portion

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On January 1, 2010, PRELIM Company sold equipment with a carrying amount of P400,000 to Finals, Inc. As payment, Finals gave PRELIM a P600,000 note. The note bears an interest rate of 4% and is to be repaid in three equal annual installments of P200,000 plus interest on the unpaid balance. The first payment is due December 31, 2010. The market price of the equipment is not reliably determinable. The prevailing interest rate for notes of this type is 14%.

Problem 1: How much is the interest income to be recognized on December 31, 2010?

Problem 2: How much is the carrying amount of the current portion of the note on December 31, 2010?

Problem 3: How much is the carrying amount of the noncurrent portion of the note on December 31, 2010?

Reference no: EM132751348

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