What total cost of the machinery and equipment account is

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Question: Charming Company purchased several machines in 2016 as follows:

• January 5: A slicing machine was purchased. A down payment of P250,000 was made and 5 annual installments of 200,000 are to be made beginning January 5, 2017. The cash price of the machine was P1,000,000.

• March 6: A mixing machine by issuing to the seller a three-year, non-interest bearing note for P800,000. In recent borrowing, Charming Company has paid a 12% interest for this type of note.

• July 1: Charming Company issues a P900,000, 5-year, non-interest bearing note in exchange for a new equipment when the market rate of interest for obligations of this nature was 10%. Charming Company will pay off the note in five equal installments starting July 1, 2017.

• December 31: Charming Company issues a P1,750,000, 5-year, non interest bearing note in exchange for a labeling machine when the prevailing market rate of interest for obligations of this nature was 8%. Charming Company will pay off the note in four equal installments every December 31 starting December 31, 2016.

The total cost of the machinery and equipment account is?

Reference no: EM132741953

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