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- On 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. 6,000Hamlet Corporation purchases computer equipment at a price of 100,000 on January 1, 2019, paying 40,000 down and agreeing to pay the balance in three 20.000 annual instalments beginning December 31, 2019. It is not possible to value either the equipment or the 60,000 note directly; how-ever, Hamlet's incremental borrowing rate is 12%. Required: 1. Prepare a schedule to compute the interest expense and discount amortization on the note. 2. Prepare all the journal entries for Hamlet to record the issuance of the note, each annual interest expense, and the three annual installment payments.Spath Company borrows 75,000 by issuing a 4-year, noninterest-bearing note to a customer on January 1, 2019. In addition, Spath agrees to sell inventory to the customer at reduced prices over a 5-year period. Spaths incremental borrowing rate is 12%. The customer agrees to purchase an equal amount of inventory each year over the 5-year period so that a straight-line method of revenue recognition is appropriate. Required: Prepare the journal entries on Spaths books for 2019 and 2020. (Round answers to 2 decimal places.)
- On January 1, 2019, Boater Company issues a 20,000 non-interest-bearing, 5-year note for equipment. Neither the fair value of the note nor the equipment is determinable. Boaters incremental borrowing rate is 9%. The asset has a useful life of 7 years. Prepare the journal entry for Boater to record the issuance of the note on January 1.On 15 April 2021, Growth Realty Ltd purchased a piece of equipment worth $200,000 by accepting a 6 - month discounted bank bill. The bill has a face value of $209,000 and is due for settlement on 15 October 2023. Required: (a) State the items and amounts, if any, that would appear in each of Growth Realty Ltd's financial statements on 30 June 2023 pertaining to the discounted bill. Provide your working process. (1) Income statement items) and amount(s): (i) Balance sheet items) and amounts): (ili) Cash flow statement items) and amount(s) ):On January 1, 2021, Byner Company purchased a used tractor. Byner paid $5,000 down and signed a noninterestbearing note requiring $25,000 to be paid on December 31, 2023. The fair value of the tractor is not determinable. An interest rate of 10% properly reflects the time value of money for this type of loan agreement. The company’s fiscal year-end is December 31. Required:1. Prepare the journal entry to record the acquisition of the tractor. Round computations to the nearest dollar.2. How much interest expense will the company include in its 2021 and 2022 income statements for this note?3. What is the amount of the liability the company will report in its 2021 and 2022 balance sheets for this note?
- On December 31, 2019, Entity A enters into a contract with Customer B to transfer a license for a fixed fee of P100,000 payable as follows: • 20% is payable upon signing of contract. • 80% is represented by a note receivable collectible in 4 equal annual installments starting December 31, 2020. The appropriate discount rate is 12% (Use PV factor = 3.0375) The license provides Customer B the right to use Entity A's patented processes. Customer B continues to operate using its trade name and has the discretion of developing a new product name for the products it will produce using the patented processes. The license does not explicitly require Entity A to undertake activities that will significantly affect the intellectual property to which Customer C has rights. Neither does Customer B expect that Entity A will undertake such activities. Entity A grants the license to Customer B on December 31, 2019. How much revenue from the franchise contract will Entity A recognize in 2019?Bridgeport Inc. enters into an agreement on March 1, 2020, to sell Werner Metal Company aluminum ingots. As part of the agreement, Bridgeport also agrees to repurchase the ingots on May 1, 2020, at the original sales price of $190,000 plus 3%. (a) Prepare Bridgeport's journal entry necessary on March 1, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles ancienter O for the amounts.) Account Titles and Explanation eTextbook and Media List of Accounts Debit CreditStraight Industries purchased a large piece of equipment from Curvy Company on January 1, 2019. Straight Industries signed a note, agreeing to pay Curvy Company $370,000 for the equipment on December 31, 2019. The market rate of interest for similar notes was 10%. The present value of $370.000 discounted at 10% for four years was $252,715. On January 1, 2019, Straight Industries recorded the purchase with a debit to equipment for $252,715 and a credit to notes payable for $252,715. On Straight Industries' balance sheet for the year ended December 31, 2019, the book value of the liability for notes payable, including accrued interest would be closest to: Multiple Cholce $277,987. $289.715. $285,208. $287.408.
- On October 10, 2020, Executor Co. entered into a contract with Belisle Inc. to transfer Executor's specialty products (sales value of $10,000, cost of $6,500) on December 15, 2020. Belisle agrees to make a payment of $5,000 upon delivery and signs a promissory note to pay the remaining balance on January 15, 2021. What entries does Executor make in 2020 on this contract? Ignore time value of money considerations.Please help me by showing your solution in good accounting form. Thank you! NOREEN INC, a truck dealer, sells a truck on January 1, 2019, to MENDOZA INC for P3,000,000. NOREEN agrees to repurchase the truck on December 31, 2020 for P3,630,000. 1. Assuming a 10% is imputed in the agreement, how much is the liability of NOREEN on January1, 2019?A. 1,500,000 C. 3,000,000B. 1,815,000 D. 3,630,000 2. Using the information above, what is the interest expense for 2019?A. None C. 330,000B. 300,000 D. 630,000 3. How much should NOREEN INC record interest and retirement of its liability to MENDOZAINC on December 31, 2020?A. None C. 330,000; 3,630,000B. 300,000; 3,600,000 D. 630,000; 3,630,000Cass Company enters into a contract with Dearborn Inc. to sell it $50,000 of goods with delivery on May 10, 2019. Cass manufactured the goods at a cost of $33,000. The contract is signed on April 15, 2019, at which time Dearborn pays Cass $25,000. Cass delivers the goods on May 10, 2019, and Dearborn pays the final $25,000 on that date. Required: 1. What is the transaction price? 2. Prepare Cass’s journal entries related to the contract with Dearborn.
