Professional Documents
Culture Documents
2016 with face of 6,000,000. The bank discount rate is 12%. The discounting transaction is accounted for
a conditional sale with recognition of contingent liability. On October 1, 2020, the maker dishonored the
note receivable. The entity paid the bank the maturity value of the note plus protest fee of P50,000. On
December 31, 2016, the entity collected the dishonored note receivable in full plus 12% annual interest on
the total amount due.
1. What amount was received from the note receivable discounting on April 1, 2020?
а. 6,063,000
b. 6,450,000
c. 6,150,000
d. 5,963,000
SOLUTION:
Principal 6,000,000
a. 450,000
b. 387,000
c. 87,000
d.63,000
SOLUTION:
Principal 6,000,000
Loss 87,000