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What is the carrying value of the face value notes

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Question - On January 1, 2018, CLI Corporation made the following acquisitions:

1. Purchased land by issuing P1 million non-interest-bearing note payable after 3 years.

2. Purchased an equipment by issuing a non-interest promissory note that requires three annual installment payments of P100,000 every December 31.

The interest rate charged on the notes is 10%. The present value of P1 at 10% for 3 periods is 0.75131 while the present value of an ordinary annuity of P1 at 10% for 3 periods is 2.4868.

Required -

1. What is the carrying value of the P1 million face value note at December 31, 2019?

2. What is the carrying value of the P300,000 face value notes at December 31, 2018?

Reference no: EM133128793

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