In relation to this transaction, what is the total income to be recognized in Optimistic’s 2019 statement of comprehensive income? (Round PVF to 4 decimals)
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On July 1, 2019, Optimistic Company sold a machine costing P500,000 with accumulated depreciation of P380,000. On the date of sale, Optimistic received as consideration for the sale, a P300,000 noninterest-bearing note, due July 1, 2022. There was no established exchange price for the equipment and the note had no ready market. The prevailing rate of interest for a note of this type at July 1, 2019 was 12% and 13% on December 31, 2019. In relation to this transaction, what is the total income to be recognized in Optimistic’s 2019 statement of comprehensive income? (Round PVF to 4 decimals)
- P119,165 P180,000
- P101,445 P106,352
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- On January 1, 2019, Park Company accepted a 36,000, non-interest-bearing, 3-year note from a major customer in exchange for used equipment. The equipment had originally cost Park 200,000 and had a book value of 20,000 on the date of the sale. At the 12% imputed interest rate for this type of loan, the present value of the note is 25,500 on January 1, 2019. Park uses the effective interest rate. What is the carrying value of the note receivable on Parks December 31, 2019, balance sheet? a. 28,560 b. 29,000 c. 32,500 d. 36,000On July 1, 2019, Aldrich Company purchased as an available-for-sale security 200,000 face value, 9% U.S. Treasury notes for 194,000. The notes mature July 1, 2020, and pay interest semiannually on January 1 and July 1. The notes were sold on December 1, 2019, for 199,000. Aldrich normally uses straight-line amortization on all of its notes. In its income statement for the year ended December 31, 2019, what amount should Aldrich report as a gain on the sale of the available-for-sale security? a. 2,500 b. 3,500 c. 5,000 d. 6,000On January 1, 2019, Northfield Corporation becomes delinquent on a 100,000, 14% note to First National Bank, on which 16,651 of interest has accrued. On January 2, 2019, the bank agrees to restructure the note. It forgives the accrued interest, extends the repayment date to December 31, 2021, and reduces the interest rate to 10%. Required: Prepare a schedule for Northfield to compute the annual interest expense in regard to the preceding note for each year of the restructuring agreement.
- On January 1, 2019, VWX Corporation sold equipment costing P380,000 with accumulated depreciation of P160,000 on the date of sale. Adobo received as consideration for the sale, a P400,000, non-interest bearing note, due January 1, 2022. There was no established exchange price for the equipment and the note had no read market. The prevailing rate of interest for a note of this type at January 1, 2019 was 10%. The present value of 1 at 10% for three periods is 0.75. What is the note’s carrying amount at December 31, 2019? 135,000 340,000 330,000 300,000On January 1, 2019, VINX Corporation sold equipment costing P380,000 with accumulated depreciation of P160,000 on the date of sale. ABOD received as consideration for the sale, a P400,000, non-interest bearing note, due January 1, 2022. There was no established exchange price for the equipment and the note had no read market. The prevailing rate of interest for a note of this type at January 1, 2019 was 10%. The present value of 1 at 10% for three periods is 0.75. What is the note’s carrying amount at December 31, 2019?On January 1, 2019, DEXTER Company sold equipment with a carrying amount of P4,800,000 in exchange for a P6,000,000 non-interest bearing note due January 1, 2022. There was no established exchange price for the equipment. The prevailing rate of interest for a note of this type on January 1, 2019 was 10%. 1. What amount should be reported as gain or loss on sale of equipment? 2. What amount should be reported as interest income for 2019?
- On January 1, 2021, Enigma Company sold an equipment costing P500,000 which had a carrying amount of P350,000, receiving a P125,000 down payment and, as additional consideration, a P400,000 noninterest bearing note due on January 1, 2024. There was no established exchange price for the equipment, and the note had no ready market. The prevailing rate of interest for a note of this type at January 1, 2021 was 12%. The present value of 1 at 12% for three periods is 0.7118. Required: Prepare journal entries for 2021, 2022, 2023 and 2024.On January 01, 2021, The Company sold equipment costing P760,000 with accumulated depreciation of P320,000 on the date of sale. Company received as consideration for the sale, a P800,000 noninterest-bearing note due January 1, 2025. There was no established exchange price for the equipment and the note had no ready market. The prevailing rate of interest for a note of this type on January 01, 2021 was 5%. Using two decimal places for the present value (PV) factor, what is the note’s carrying amount on December 31, 2021?On July 1, 2021, LIBAGO Company sold a machine costing P500,000 with accumulated depreciation of P380,000 on the date of sale. LIBAGO received as consideration for the sale, a P300,000 non-interest bearing note, due July 1, 2024. There was no established exchange price for the equipment and the note had no ready market. The prevailing rate of interest for a note of this type at July 1, 2021 was 12% and 13% on December 31, 2021. 37. In relation to this transaction, the total income to be recognized in LIBAGO’s 2021 profit or loss is:
- On January 2, 2019, Anne Inc. sold equipment which has a carrying amount of $400,000 in exchange for a $600,000 4-year non-interest-bearing note that will be due on January 2, 2023. There was no established exchange price for the equipment. The prevailing rate of interest for a note of this type on January 2, 2019 was 10%. What should be recorded as the carrying value of the note receivable as of December 31, 2021 balance sheet?On January 01, 2021, Scottie Boo sold equipment costing P10,000,000 with accumulated depreciation of P5,500,000 in exchange for a P6,000,000 noninterest bearing note due in equal annual installments of P2,000,000 every December 31, 2021. There was no established exchange price for the equipment and the note had no ready market. The prevailing rate of interest for a note of this type at January 01, 2021 was 10%. What is the carrying amount of the note on December 31, 2021? (Round off the present value factors to 4 decimal places)On January 1, 2021, Gobert Company sold property to Beasley Company. There was no established exchange price for the property, and Beasley gave Gobert a $751,000 zero-interest- bearing note payable on January 1, 2025. The prevailing rate of interest for a note of this type is 6%. The property had a book value of $341,000 to Gobert. What should be the balance of the Discount on Notes Payable account on the books of Beasley at December 31, 2021 after adjusting entries are made, assuming that the effective-interest method is used?
