PLEASE PROVIDE ANSWER AND EXPLANATION.

PROBLEM A

On January 1, 2021, an entity issues a 3-year, non-interest bearing note payable amounting to P3,000,000 in exchange for equipment. The principal on the note is due in three equal annual installments payable every December 31. The effective interest rate on January 1, 2021 is 18%.

Requirement: 1. Compute for the current and noncurrent portion of the note payable on December 31, 2021. 2. Provide all the entries during the term of the note.

PROBLEM B

An entity issues the following notes payable on January 1, 2021: A. P5,000,000 non-interest bearing note payable due on December 31, 2024. B. P4,000,000 non-interest bearing note payable due in four equal annual installments every December 31. C. P8,000,000 non-interest bearing note payable due in five equal annual installment every January 1. The first installment is due on January 1, 2021. The effective rate of interest in all of the notes above is 15%.

Requirement: Prepare the amortization table for each of the notes payable above

Reference: IA 3, Valix, Peralta