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What amount of interest income should ms price recognize

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Problem 1: On January 1, 2016, Ann Price loaned P45,078 to Joe Kiger. A zero-interest-bearing note (face amount, P60,000) was exchanged solely for cash; no other rights or privileges were exchanged. The note is to be repaid on December 31, 2018. The prevailing rate of interest for a loan of this type is 10%. The present value of P60,000 at 10% for three years is P45,078. What amount of interest income should Ms. Price recognize in 2016?

a. P18,000.

b. P6,000.

c. P13,524.

d. P4,508.

Reference no: EM132628414

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