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How much is the gain or loss from the sale of equipment

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Question: On January 1, 2010, PRELIM Company sold an equipment. The equipment, purchased 10 years ago, was carried on PRELIM's books at a cost P400,000 and its accumulated depreciation was P275,000. PRELIM Company received a non-interest bearing note for P220,000 from the buyer. The note is due on December 31, 2011. There is no readily available market value for the equipment, but the current market rate of interest for comparable notes is 10%.

1. How much is the gain/loss from the sale of equipment?

2. How much is the interest income to be recognized on December 31, 2010?

3. How much is the carrying amount of the note on December 31, 2010?

Reference no: EM132752361

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