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What amount should recognized as gain on sale of equipment

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On January 1, 2019, an entity sold equipment with carrying amount of P2,000,000 in exchange for a noninterest bearing note for P5,000,000 requiring ten annual payments for P500,000. The first payment was made on December 31, 2019. The market interest for similar note was 12%. The present value of an ordinary annuity of 1 is 5.65 for ten periods and 5.33 for nine periods.

Problem 1: What amount should be recognized as gain on sale of equipment in 2019?

 

Reference no: EM132756773

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