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Find how much is the interest income

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Problem 1: On July 1, 20x1, ABC Co. sold machinery costing P12,000,000 with accumulated depreciation of P9,000,000 in exchange for a 3-year, 3%, P4,000,000 note receivable. Principal is due on July 1, 20x4 but interests are due semiannually every July 1 and January 1. The prevailing interest rate for this type of note is 12%. How much is the interest income in 20x1?

a. 186,893

b. 381,399

c. 94,147

d. 120,000

Reference no: EM132669971

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