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How much is the discount on notes receivables

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Reference no: EM132804450

Question - Oust the Turtle Now Corporation sells equipment. On January 1, 2020, the entity sold equipment to Chai Na Company costing P 280,000 for P 400,000.

Chai Na signed a non-interest bearing note for P 400, 000 in four equal installments every december 31. The cash sales price for the equipment is P 350,000.

The effective rate is 5%.

Required - How much is the discount on notes receivables (also known as unearned interest income)?

A. P 50,000

B. Zero

C. P 70,000

D. P 45,405

Reference no: EM132804450

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