Example 1: Non Interest-Bearing Note On January 1, 2017, Allan Manufacturing sells an equipment costing P800,000 with accumulated depreciation of P450,000. The company receives as consideration P100,000 and a non interest- bearing note for P400,000 due on Dec. 31, 2017. The prevailing interest rate for a note of this type is 15% 2017 Jan. 1 Cash 100,000 400.000 450,000 Notes receivable Accumulated Dep.- Equipment Equipment Discount on Notes Gain on Sale of Equipment 800,000 137,000 13,000 Face Value of the Note Present Value of the Note (0.6575 x 400.000) Discount 400,000 263,000 s 137,000 Cash Received PV of Note Sales Price Carrying Value Gain on Sale 100,000 263,000 363,000 350,000 13,000 Amortization Table Amortized Cost Date Jan. 1, 2017 Dec. 31, 2017 Dec. 31, 2018 Dec. 31, 2019 Interest Revenue 39,450 45,368 52,182 263,000 302,450 347,818 400,000 Kindly show the solutions: A. Discount NOtes B. Gain on Sale of Equipment C. Present Value of the Note D. Carrying Value