Problem 5

On January 1, 2020, Rock Co. sold machinery with historical cost of P5,000,000 and accumulated depreciation of P1,900,000 in exchange for a 3-year, 3%, P3,000,000 note receivable. Principal is due January 1, 2023 but interests are due annually every December 31. The prevailing interest rate for this type of note is 12%.

How much is the present value of the note to be recorded on January 1, 2020?

Group of answer choices

P2,336,161.22

P2,351,505.56