Problem 6.

Problem On December 31,2018, Park Company sold used equipment with carrying amount of 2,000,000 in exchange for a noninterest bearing note of P5,000,000 requiring ten annual payments of P500,000. The rst payment was made on December 3 1,2019. The market interest for similar note was 12%. The present value of an ordinary annuity of l at 12% is 5.65 for ten periods and 5.33 for nine periods. 1. What is the carrying amount of the note receivable on December 31, 2018? 2. What is the gain on sale of equipment to be recognized in 2018? 3. What amount should be recognized as interest income for 2019? 4. What is the carrying amount of the note receivable on December 31,2019