Question
On January 2, 2020, SMILE Inc. sold equipment with a cost of P600,000 and accumulated depreciation of P330,000 in exchange for a P800,000 non-interest-bearing note
On January 2, 2020, SMILE Inc. sold equipment with a cost of P600,000 and accumulated depreciation of P330,000 in exchange for a P800,000 non-interest-bearing note due January 2, 2023. There was no established exchange price for the equipment. The prevailing rate of interest for a note of this type at January 2, 2020 was 10%. How much is the gain (loss) on sale of equipment?
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Managerial Accounting
Authors: James Jiambalvo
5th edition
1118078764, 978-1118078761
