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What the note will be reported on dansko statement

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Reference no: EM132628402

Problem 1: On January 1, 2017, Jantzen Company sold land to Dansko Company. There was no established market price for the land. Dansko gave Jantzen a P2,400,000 Zero-interest-bearing note payable in three equal annual installments of P800,000 with the first payment due December 31, 2017. The note has no ready market. The prevailing rate of interest for a note of this type is 10%. The present value of a P2,400,000 note payable in three equal annual installments of P800,000 at a 10% rate of interest is P1,989,600. The note will be reported on Dansko's 2017 statement of financial position at a carrying value of

a. P2,126,400

b. P2,188,560

c. P1,989,600

d. P2,400,000

Reference no: EM132628402

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