On January 1, 2020, Mikey Company sold a piece of equipment with a carrying amount of P1,800,000 to Sanjiro Company in exchange for a 10% P2,400,000 note that is due on December 31, 2023, and is payable in equal annual installments plus interest that is based on the face of the note. The effective interest rate of the note is 14%.

Note: Round off present value factors up to four decimal points; round off the final value up to two decimal points. E.g., 0.7812 and 123,518.25 

Questions: 

What is the initial carrying amount of the note? What is the carrying amount of the note as of December 31, 2021? How much is the interest for the year 2021? How much is the balance of the discount on the notes as of December 31, 2022?

Answer rating: 100% (QA)

aThe initial carrying amount of the note is P 2 400 000 The initial carrying amount of the note is t... View the full answer