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Question - On January 1, 2020, Ken Company sold goods to Wolf Company. Wolf Company signed a non-interest bearing note requiring payment of P600,000 annually for seven years. The first payment was made on January 1, 2020.
The PV for this type of note at date of issuance was 10%. PV factors are as follows:
PV of 1 at 10% for 6 periods: 0.56
PV of 1 at 10% for 7 periods: 0.51
PV of ordinary annuity at 10% for 6 periods: 4.36
PV of ordinary annuity at 10% for 7 periods: 4.87
Required - What amount should be recorded as sales revenue in January 2016?
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