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(AICPA) 5. On January 1, 20x1, RELISH TASTE Co. acquired a machine by issuing a 3%, P4,000,000 note due on January 1, 20x4. Interest is payable semiannually. The effective interest rate is 12%. How much is the carrying amount of the note on initial recognition? a. 3,114,884 b. 4,000,000 c. 3,135,340 d. 3,174,309 6. On December 30, 20X6, Bart, Inc., purchased a machine from Fell Corp. in exchange for a noninterest bearing note requiring eight payments of P20,000. The first payment was made on December 30, 20X6, and the others are due annually on December 30. At the date of issuance, the prevailing rate of interest for this type of note was 11%. On Bart's December 31, 20x6 balance sheet, the note payable to Fell was b. 102,920 c. 104,620 d. 114,240 a. 94,240 (AICPA) Use the following information for the next two questions: You finished your studies, passed the CPA board exams, and now an accountant. A real estate company offered to sell you a house with a cash selling price of P14,000,000 under an in-house financing agreement. The amortization will be on a monthly basis over a period of 25 years and the effective interest rate is 12%. You are wondering if you can afford to purchase the house. You estimated your monthly expenditure to be P36,600, which included a risk adjustment allowance. 7. What should be the minimum balance of your monthly take- home salary so that you will be able to afford to purchase the house? a147,451.38 b. 148,051.38 c. 151,048.38 d. 184,051.38 (Hints: PV of 1 @ 1%, n=300 = 0.0505344875; PV of ord. annuity of 1 @1%, n=300 = 94.9465512548) 8. How much is the total interest expense on the financing agreement? a. 30,235,414 c. 20,235,414 b. 23,335,216 d. 13,265,992