Problem 5.

Problem 5 On January 1,2018, Ott Company sold goods to Fox Company. Fox signed a noninterest-bearing note requiring payment of P600,000 annually for seven years. The rst payment was made on January 1, 2018. The prevailing rate of interest for this type of note at date of issuance was 10%. PV of an ordinary annuity of 1 at 10% for 6 periods 4.36 PV of an ordinary annuity of 1 at 10% for 7 periods 4.87 1. What amount should be recorded as sales revenue in January 2018? 2. What is the carrying amount of the note receivable on January 1, 2018? 3. What is the interest income for 2018? 4. What is the carrying amount of the note receivable on December 31,2018