Sonia Company purchased several machines in 2020 as follows: 

• January 6: A mixing machine by issuing to the seller a three-year, non-interest bearing note for P1,200,000. In recent borrowing, Sonia Company has paid a 7% interest for this type of note. 

• July 1: Sonia Company issues a P1,600,000, 4-year, non-interest bearing note in exchange for a new equipment when the market rate of interest for obligations of this nature was 12%. Sonia will pay off the note in four equal installments every July 1, starting July 1, 2021.

 • December 31: Sonia Company issues a P1,200,000, 4-year, non-interest bearing note in exchange for a labeling machine when the prevailing market rate of interest for obligations of this nature was 10%. Ross Company will pay off the note in four equal installments every December 31 starting December 31, 2020.

Determine the total cost of the machinery and equipment account?

Answer rating: 100% (QA)

To determine the total cost of the machinery and equipment account we need to calculate the present ... View the full answer