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How much is the carrying amount of note receivable

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On December 31, 2019, Gel Company sold used equipment with carrying amount of P2,000,000 in exchange for a noninterest bearing note of P5,000,000 requiring 10 annual payments of P500,000. The first payment was made on December 31, 2020. The market interest for similar note was 12%. The present value of ordinary annuity of 1 at 12% is 5.65 for 10 periods and 5.33 for 9 periods.

Problem 1: How much is the gain on sale of equipment to be recognized in 2019?

Problem 2: how much is the interest income for 2020?

Problem 3: how much is the carrying amount of note receivable on December 31, 2020?

Reference no: EM132776474

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