Problem $1$

On April $1,2022,$ the KFC Delivery Service issued a P$9,000,000$ non$-$interest$-$bearing

note due March $31,2025$ for a piece of land with a cash price of P$6,949,800.$

Required:

a$)$ Determine the effective interest rate of this note

b$)$ Determine the interest expense for the year ended December $31,2022$

c$)$ Determine the carrying amount of the note at December $31,2022$

d$)$ Prepare necessary entries for the years $2022$ through $2025$ relative to the

foregoing, including any adjustments at year$-$end, December $31.$

Problem $2$

On October $1,2022,$ The Burgee's Food Corporation purchased three units of baking

equipment by issuing a four$-$year, $9\%$ promissory note with face value of $P2,591,760.$

The note and accrued interest are payable in equal amounts of P$800,000$ every

September $30,$ starting September $30,2023.$ The periodic payment of P$800,000$ is to be

applied first to interest, and the remainder to the principal.

Required:

a$)$ Prepare amortization table over the term of the note.

b$)$ Prepare entries for years $2022$ through $2026$ as a result of the foregoing

c$)$ What amount relating to the note shall be presented as current and non$-$current

liabilities on December $31,2023$ statement of financial position?