PROBLEM 16: Brand Co. accepted from a customer a P4,000,000, 90-day, 12% interest-bearing note dated August 31, 2015. On September 30, 2015, the entity discounted the note with recourse at the Apex State Bank at 15%.

However, the proceeds were not received until October 1, 2015. The discounting with recourse is accounted for as a conditional sale with recognition of a contingent liability.

1. What is the amount received from the discounting of note receivable?

a. P4,017,000.

b. P4,120,000

c. P4,103,000

d. P3,965,500

2. What is the loss on note receivable discounting? a. P40,000

b. P23,000.

c. P17,000

d. P20,000