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Notes Payable Calculations Guide

The document outlines various accounting scenarios involving non-interest bearing notes payable issued by different companies, detailing their amounts, due dates, and effective interest rates. It poses specific questions regarding the carrying amounts, interest expenses, and noncurrent portions of these notes on given dates. The scenarios require calculations based on the provided financial data and interest rates.

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francine.vizconde14
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9 views2 pages

Notes Payable Calculations Guide

The document outlines various accounting scenarios involving non-interest bearing notes payable issued by different companies, detailing their amounts, due dates, and effective interest rates. It poses specific questions regarding the carrying amounts, interest expenses, and noncurrent portions of these notes on given dates. The scenarios require calculations based on the provided financial data and interest rates.

Uploaded by

francine.vizconde14
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

ASSIGNMENT – NOTES PAYABLE

1. On January 1, 2025, A COMPANY ., issued a ₱32,000,000 non-interest bearing note

that is due in three annual installments as follows:

Date Amount

January 1, 20×8 ₱ 15,000,000

January 1, 20×9 10,000,000

January 1, 2010 7.000.000

Total P32,000,000

The effective interest rate is 12%. How much is the carrying amount of the note on initial

recognition?

2. B CO. purchased an inventor on January 1, 2025 with a list price of P4,400,000 and a cash

selling price of P4,000,000 in exchange for a P4,800,000 noninterest-bearing note due on

December 31, 2023. The carrying amount of the note on December 31, 20x1 is approximate equal

To?

3. C Co. acquired a machine on January 1, 2025 by paying cash of P400,000 and issuing a

noninterest-bearing note of P4,000,000 due in 4 equal annual installments starting on December

31, 2025. The prevailing rate of interest for this type of note is 12%. How much is the noncurrent

portion of the note on December 31, 2025?

4. On January 1, 2023, D Co. acquired a washing machine by paying cash of ₱400,000

and issuing a noninterest-bearing note of P4,000,000 due on January 1, 2026. The effective

interest rate on the note is 12%. How much is the interest expense in 20x3?
5. On January 1, 2026, E Co. acquired an intangible asset by paying cash of P400,000 and issuing

a noninterest-bearing note payable of P4,000,000 due in 4 equal annual installments. The first

installment is due on January 1, 20x6, while the succeeding installments are due every December

31. The effective interest rate is 12%. How much is the carrying amount of the note on December

31, 20×6?

6. On January 1, 2025, F Co. issued a ₱4,800,000 noninterest-bearing note due in six equal semi-

annual payments starting July 1, 20x5. The effective interest rate is 10%. How much is the

carrying amount of the note on December 31, 20x5?

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