Auditing and Assurance

The balance sheet of Pacala Corporation reported the following long-term receivables as of December 31, 201 A: Notes receivable from sale of plant P9,000,000 Notes receivable from officer 2,400,000 In connection with your audit, you were able to gather the following transactions during 201B and other information pertaining to the company's long-term receivables: a. The notes receivable from sale of plant bears interest at 12% per annum. The notes are payable in 3 annual installments of P3,000,000 plus interest on the unpaid balance every April 1. The initial principal and interest payment were made on April 1, 201 B. b. The notes receivable from officer is dated December 31, 201A, earns interest at 10% per annum, and is due on December 31, 2010. The 201 B interest was received on December 31, 201 B. c. The corporation sold a piece of equipment to Lover, Inc. on April 1, 2019, in exchange for a P1,200,000 non-interestbearing note due on April 1, 201D. The note had no ready market, and there was no established exchange price for the equipment. The prevailing interest rate for a note of this type at April 1, 201 B, was 12%. The present value factor of 1 for two periods at 12% is 0.797 while the present value factor of ordinary annuity of 1 for two periods at 12% is 1.690. d. A tract of land was sold by the corporation to Peace Co. on July 1, 201 B, for P6,000,000 under an installment sale contract. Peace Co. signed a 4-year 11% note for P4,200,000 on July 1, 201 B, in addition to the down payment of P1 00,000. The equal annual payments of principal and interest on the note will be P1,353,750 payable on July 1, 2010, 201D, 201E, and 201 F. The land had an established cash price of P6,000.000. and its cost to the corporation was P4,500.000. The collection of the installments on this note is reasonably assured. Required: Based on the above and the result of your audit, determine the following: 6. Non-current notes receivable as of December 31. 201 B. 7. Current portion of long-term notes receivable as of December 31, 201 B. 8. Accrued interest receivable as of December 31, 201 B. 9. Unamortized discount on note receivable from sale of equipment on December 31. 201 B. 10. Interest income for the year ended December 31. 201 B