On January 1,2015, DRGE Co. sold a machinery with a historical cost of P1,000,000 and accumulated depreciation of P200,000 in exchange for cash of P180,000 and a noninterest-bearing note receivable of P800,000 due on January 1, 2018. The prevailing rate of interest for this type of note is 11%. What is the net effect of the transaction in DRGE's 2015 profit or loss?

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In the given case On 1st January 2015 DRGE Co sold a machinery with a historical cost ... View the full answer