A. On January 1, 2021, Alen Company purchased a piece of land and in exchange issued a 5-year, P1,200,000 face value noninterest bearing note. The fair value of the land and the market value of the note is not determinable. The prevailing interest rate for a similar transaction is 8%a.

1. The initial measurement of the note

2. The interest expense to be reported in the 2021 income statement

3. The carrying value of the note at December 31, 2022

B. On January 1, 2021, Barry Company acquired several machines and in exchange issued a P3,000,000 face value note. The note shall be paid in 6 annual instalments starting December 31, 2021. The agreement made no mention of interest. The fair value of the machines and the market value of the note were not determinable. The prevailing rate for a similar note was identified to be 9%.

4.Initial measurement of the note

5. Interest expense to be reported in the 2021 income statement

6. The carrying value of the note at December 31, 2021

C. On April 3, 2021, Casper Company acquired an equipment by issuing a P2,500,000 face value note. The 5 year note requires equal semi-annual payments starting April 1, 2021. The agreement made no mention of interest.The fair value of the equipment and the market value of the note were not determinable. The prevailing rate of interest for a similar note was 12%

7.Initial measurement of the note

8. Interest expense to be reported in the 2021 income statement

9. The carrying value of the note at December 31, 2021