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What amount should be reported as interest income

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PROBLEM - On July 1, 2020, Wanda Co. sold equipment with a carrying amount of P480,000 in exchange for a P600,000 noninterest-bearing note due January 2, 2023. There was no established exchange price for the equipment. The prevailing rate of interest for a note of this type at July 1, 2020 was 10%. In Wanda's 2020 income statement, what amount should be reported as: 1- Interest income? 2- Gain or (loss) on sale of machinery?

Reference no: EM132930052

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