ACCOUNTING FOR NOTES RECEIVABLE

SHOW COMPLETE SOLUTIONS IN EVERY ANSWER.

The questions are already given just answer it. All data complete.

Answer the questions (ex: 1,2,3)

Please use ALL the decimal points in computing for the PV FACTOR

7. On January 1, 2016, DC Company sold land costing P850,000 and received in exchange a four year note with a face amount of P1,300,000 bearing a rate of 19% which approximates the current interest rate in the market. DC Company uses the calendar year for reporting purposes. 1. Gain on sale of the land is? 2. Carrying value of the note in December 31, 2016? 3. Interest income for 2017? 8. On October 1, 2016, Marvel Company sold land costing P3,000,000 and received in exchange a note with face amount of P4,250,000 and a maturity date of October 1, 2021. It bears an interest rate of 8% which approximates the current interest rates in the market. Marvel Company uses the calendar year for reporting purposes Selling price of the land? Note receivable amount reported in the current section of the 2016 statement of financial position? 3. Interest income to be reported in 2017? 9. On August 1, 2016, Superman Company sold an equipment with a carrying amount of P750,000 and received as payment a 9% 1,000,000 face value note. Equal principal payments plus interest are due every August 1, from 2017 to 2020. The first principal payment was made on August 1, 2017. Superman Company uses the calendar year for reporting purposes. 1. Gain or loss on the sale of equipment? 2. 3 . Interest income for 2017? Carrying value of the notes receivable account on December 31, 2017? 10. Captain America sold an equipment on January 2, 2016. The agreed price was P3,000,000. A P1,000,000 down payment was received, and Captain America Company accepted a mortgage note for the balance. The note shall carry a 10% rate of interest (computed on the unpaid balance) for 5-year period. Equal payments are to be made at the end of each year beginning December 31, 2016. Captain America Company's accounting period ends on December 31. 1. Annual collection? WN Interest income for 2016? Notes receivable reported in the current section of the December 31, 2017 statement of financial position.? 11. On April 1, 2016, Batman Company sold a merchandise to Bruce Enterprises in exchange for a P525,000 non-interest bearing note due on April 1, 2020. There was no established exchange price for the equipment and the note has no ready market. The prevailing rate of interest for a note of this type at April 1, 2016 was 12%. The equipment had a carrying value of P170,000 at the time of sale. The collection of the note from Bruce Enterprises is reasonably assured. Batman Company uses calendar year for reporting purposes. 1. Initial measurement of the notes receivable? 2. Interest income for 2017? 3. Unearned interest at December 31, 2018