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PLS ANSWER ALL Problem 8-23 (AICPA Adapted) On January 1, 2020, Lizelle Company received P1,000,000) on a noninterest-bearing note due in three years. The market
PLS ANSWER ALL
Problem 8-23 (AICPA Adapted) On January 1, 2020, Lizelle Company received P1,000,000) on a noninterest-bearing note due in three years. The market rate of interest on such date is 10%. The entity irrevocably elected the fair value option in measuring the note payable. On December 31, 2020, the risk factors indicated that the rate of interest applicable to the borrowing was 9%. The present value factors at 10% and 9% are: PV factor 10%, 3 periods .751 PV factor 9%, 3 periode PV factor 10%, 2 periods PV factor 9%, 2 perioda PV factor 10%, I period 909 PV factor 9%, I period 1 What is the initial carrying amount of the note payable on January 1, 2020? 772 8442 .917 826 a. 751,000 b. 772,000 c. 826,000 d. 909,000 2. What is the carrying amount of the note payable on December 31, 2020? a. 751,000 b. 772,000 c. 917,000 d. 842,000 3. What amount of net gain or loss from the change in fair value of the note payable should be reported for 2020? a. 158,000 gain b. 158,000 loss c. 174,000 gain d. 174,000 loss 300 Step by Step Solution
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