The following long-term receivables were reported in the December 31, 2013, statement of financial

position of MANGO CORPORATION:

Notes receivable from sales of plant P3,000,000
Notes receivable from officer 800,000

The following transactions during 2014 and other information relate to the company’s long-term
receivables:

1. The note receivable from sale of plant bears interest at 12% per annum. The note is payable in
3 annual installments of P1,000,000 plus interest on the unpaid balance every April 1. The
annual principal and interest payment was made on April 1, 2014.
2. The note receivable from officer is dated December 31, 2013., earns interest at 10% per annum,
and is due on December 31, 2016. The 2014 interest was received on December 31, 2014.
3. Mango sold a piece of equipment to Banana, Inc. on April 1, 2014, in exchange for a P400,000
non-interest-bearing note due on April 1, 2016. The note had no ready market, and there was
no established exchange price for the equipment. The prevailing interest rate for a note of this
type at April 1, 104, was 12%. The present value factor of 1 for two periods at 12% is 0.797.
4. A tract of land was sold by Mango to Orange, Inc. on July 1, 2014, for P2,000,000 under an
installment sale contract. Orange signed a 4-year 11% note for P1,400,000 on July 1, 2014, in
addition to the downpayment of P600,000. The equal annual payments of principal and interest
on the note will be P451,250 payable on July 1, 2015, 2016, 2017, and 2018. The land had an
established cash prize of P2,000,000, and its cost to Mango was P1,500,000. The collection of
the installments on this note is reasonably assured.