On December 31,2010, BAIKAL COMPANY acquired a piece of equipment from Seller Company by issuing a P1,200,000
Fantastic news! We've Found the answer you've been seeking!
Question:
On December 31,2010, BAIKAL COMPANY acquired a piece of equipment from Seller Company by
issuing a P1,200,000 note, payable in full December 31, 2014. Baikal's credit rating permits it to borrow
funds from its several lines of credit at 10%. The equipment is expected to have a 5-year life and a
P150,000 salvage value. The present value of 1 at 10% for 4 periods is 0.68301.
A. What is the equipment's book value on December 31,2012?
B. What is the carrying value of the note at December 31, 2012?
Posted Date: