provide complete solutions. you Transcribed Image Text: 9. On January 2, 2020, GRAPES Company sold equipment with a carrying amount of P480,000 in exchange for a P600,000 non-interest bearing note

provide complete solutions. you Transcribed Image Text: 9. On January 2, 2020, GRAPES Company sold equipment with a carrying
amount of P480,000 in exchange for a P600,000 non-interest bearing note due
Jan 2, 2023. There was no established exchange price for the equipment. The
prevailing rate of interest for a note of this type at January 2, 2020 was 10%. The
present value of 1 at 10% for three periods is 0.75. How much should GRAPES
report as gain(loss) on sale of equipment in its 2020 income statement? (If loss,
put a negative sign before the numerical answer) *
Your answer
10. MELON Company purchased 1,000,P1,000, 10%, 5-year bonds of AVOCADO
Company. The bonds are dated January 1, 2020 and pay interest every
December 31. The bonds yield an 8% interest. The present value factors are as
follows: PV of 1 at 8% for 5 periods – 0.68; PV of 1 at 10% for 5 periods – 0.62; PV
of an annuity of 1 at 8% for 5 periods – 3.99; PV of annuity of 1 at 10% for 5
periods – 3.79. The bonds are quoted at 110 and 105 on December 31, 2020 and
2021 respectively. Assuming the business model of the company is to manage
financial assets in order to collect contractual cash flows, what is the initial
measurement of the investment in bonds on January 1, 2020? *

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