On July 1, 2022, ABC Corp. received a one-year note with a face value of P900,000...

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On July 1, 2022, ABC Corp. received a one-year note with a face value of P900,000 and a stated interest rate of 15 percent in exchange for a machine with a fair value of P1,000,000. Compute the effective interest rate for ABC Corp. At 30 September 2000, ABC Ltd had a provision for doubtful debts of P37,000. During the year ended 30 September 2001 the company wrote off debts totaling P18,000, and at the end of the year it is decided that the provision for doubtful debts should be P20,000. What should be included in the income statement for bad and doubtful debts? On July 1, 2022, ABC Corp. received a one-year note with a face value of P900,000 and a stated interest rate of 15 percent in exchange for a machine with a fair value of P1,000,000. Compute the effective interest rate for ABC Corp. At 30 September 2000, ABC Ltd had a provision for doubtful debts of P37,000. During the year ended 30 September 2001 the company wrote off debts totaling P18,000, and at the end of the year it is decided that the provision for doubtful debts should be P20,000. What should be included in the income statement for bad and doubtful debts?

Answer rating: 100% (QA)

SOLUTION a To compute the effective interest rate for ABC Corp we need to consider the fair value of the machine as well as the interest payments The ... View the full answer