On January 1, 2019, EKKO Company sold equipment with a carrying amount of P4,800,000 in...
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Accounting
On January 1, 2019, EKKO Company sold equipment with a carrying amount of P4,800,000 in exchange for a P6,000,000 noninterest bearing not due January 1, 2022. There was no established exchange price for the equipment.
The prevailing rate of interest for a note of this type on January 1, 2019 was 10%. The present value of 1 at 10% for three periods is 0.75.
What amount should be reported as interest income for 2019?
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