Find what is the carrying value of the notes receivable

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Problem 1: On January 2, 2016, Hazel Company sold for P400,000 an old machine having an original cost of P540,000 and a book value of P350,000. Hazel received a non-interest bearing promissory notes as consideration for the sale. The principal in four equal annual installments every January 1 starting on January 2, 2016. The agreement of sale states no interest rate. However, 12% would be a fair value for this type of transaction. The PV of 1 at 12% for 4 periods is .6355, the PV of Annuity of 1 at 12% for 4 periods is 3.0373 and the PV of Annuity Due at 12% for 4 periods is 3.4018. What is the carrying value of the notes receivable to be presented on the statement of financial position as of December 31, 2016?

Reference no: EM132704502

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