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How much is the interest expense for year

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Problem - GHI Company issued a 3-year, P150,000 face value noninterest-bearing note payable in exchange for a new machinery on January 01, Year 1. The note is payable in three equal annual installments every January 01, starting Year 1. No cash price of the machinery is available. The prevailing rate for similar note is 12%. PV of 1 at 12% for 3 periods is 0.7118. PV of an ordinary annuity of 1 at 12% for 3 periods is 2.4018. PV of an annuity due at 12% for 3 period is 2.6900. How much is the interest expense for Year 1?

Reference no: EM132795820

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