On January 1, 2012, RONNIE sold equipment with a carrying amount of P1,200,000 in exchange for a P1,800,000 non-interest bearing note due January 1, 2016. There was no established exchange price for equipment. The prevailing rate of interest for a note of this type was 8. The present value of 1 at 8% for 5 periods is 0.6806 and for 6 periods is 0.6302.
