Prepare journal entries to record transactions from January

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Question - On January 1, 2016, Pinky Pop Company sold a piece of land with a carrying amount of P6,000,000 in exchange for a 5% promissory note with face amount of P7,500,000. The note is payable in annual installments of P2,500,000 plus accrued interest on the outstanding balance. The first installment is due on December 31, 2016. There is no established cash price for the land and the note has no ready market. The prevailing interest rate for a note of this type is 10%. (Use the appropriate present value factors).

Required - Prepare journal entries to record the transactions from January 1, 2016 to December 31, 2018.

Reference no: EM132631994

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