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What is the carrying amount of the note receivable

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On December 31, 2019, Soo Company sold used equipment with carrying amount of P2,000,000 in exchange for a noninterest bearing note of P5,000,000 requiring ten annual payments of P500,000. The first payment was made on December 31, 2020.

The market interest for similar note was 12%. The present value of an ordinary annuity of 1 at 12% is 5.65 for ten periods and 5.33 for nine periods.

Question 1: What is the carrying amount of the note receivable on December 31, 2019?

Question 2: What is the gain on sale of equipment to be recognized in 2019?

Question 3: What is the carrying amount of the note receivable on December 31, 2020?

Reference no: EM132690794

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