On February 1, 2020, Baby Goats Unlimited took out a loan from Local City Bank for $300,000. It was a 2-year note at 5% interest, payable in 24 months with no payments due until then. Immediately, Baby Goats Unlimited transferred $150,000 of it to LivestockGen, a company that sells high tech goat breeding equipment. This represented a 50% down payment on an agreed upon $300k total contract to buy technology equipment. The remainder was put in a money market fund earning 1.2% interest until October 1, 2020 when the final payment was due to LivestockGen. On Oct 1 the remaining money was transferred from Baby Goats Unlimited to LivestockGen. Please prepare journal entries for the transactions described above.
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- On February 1, 2020, M-Way took out a loan from State Bank for $300,000. It was a 2-year note at 5% interest, payable in 24 months with no payments due until then. Immediately, M-Way transferred $150,000 of it to An Co., a company that sells high tech equipment. This represented a 50% down payment on an agreed upon $300k total contract to buy technology equipment. The remainder was put in a money market fund earning 1.2% interest until October 1, 2020 when the final payment was due to An Co. On Oct 1 the remaining money was transferred from M-Way to An Co. Instructions Please prepare journal entries for the transactions described above.On January 1, 2018, Jimbo Enterprises purchased new equipment for its training center. The equipment cost $220,000. Jimbo paid $25,000 down and is required to pay the rest in semiannual installments for the next 8 years. Jimbo's cost of borrowing is 4%. What is the total amount of interest expense Jimbo will pay over the life of the loan?The Electric Car Corporation borrowed $3,000,000 from the Bank of Walnut Creek on October 1, 2021. The loan was from an SBA (Small Business Administration) program that required interest only payments annually at the low rate of 1.75%. At the end of 5 years, on October 1, 2026 the entire loan of $3,000,000 must be repaid. In the event it is not repaid, the interest rate of 1.75% will be increased retroactively at a rate of 7.5%. In order to assure that the loan can be repaid on October 1, 2026, the Chief Financial Officer wants to set up a special fund to contribute to each and every year in order to have sufficient funds to repay the loan in full on October 1, 2026. The Investment firm of J. Edward and Associates of Emeryville, California has an investment fund available that has an annual fixed return of 5%. The Electric Car Corporation wants to start making an annual deposit to the fund beginning in one year starting on October 1, 2022, and for each of the next three years of…
- Killion Company needs to purchase new equipment, but does not have enough cash to purchase it outright. Therefore, on 1/1/21, Killion finances the purchase of the equipment by borrowing $29,000 on a 4-year, 5% installment loan. The loan specifies that Killion needs to make 4 payments of $8,178 once a year for the next four years. Each installment payment goes towards both accrued interest and the principal on the loan. Each installment payment is made on December 31. repare the journal entries for Killion to record the note's issuance and the first installment payment. (Round your intermediate alculations and final answers to the nearest dollar amount.) View transaction list Journal entry worksheet of 33 ― Next >On January 1, 20x1, Lawrence Lenders loaned $9.6 million to Wilkins Food Products, Inc. to purchase a frozen food storage facility. Wilkins signed a three-year, 4% installment note to be paid in three equal payments at the end of each year. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: Prepare the following for Lawrence Lenders: 1. Prepare the journal entry for lending the funds on January 1, 20x1. 2. Prepare an amortization schedule for the three-year term of the installment note. 3. Prepare the journal entry for the first installment payment received on December 31, 20x1. 4. Prepare the journal entry for the third installment payment received on December 31, 20x3. Complete this question by entering your answers in the tabs below. Req 2 Saved Req 1 3 and 4 2021 Prepare an amortization schedule for the three-year term of the installment note. (Enter your answers in whole dollars.) Dec. 31 Cash…Weathers Catering Supply, Inc., needs to borrow $149,000 for 6 months. State Bank has offered to lend the funds at an annual rate of 9.2% subject to a 10.5% compensating balance. (Note: Weathers currently maintains $0 on deposit in State Bank.) Frost Finance Co. has offered to lend the funds at an annual rate of 9.2% with discount-loan terms. The principal of both loans would be payable at maturity as a single sum. a. Calculate the effective annual rate of interest on each loan. b. What could Weathers do that would reduce the effective annual rate on the State Bank loan?
- Racman, Inc. needs P2,000,000 to finance its extension program. Racman, Inc. is negotiating a loan with Metropolis Bank which requires the company to maintain a compensating balance of 10% of the loan principal on deposit in a current account at the bank. Pierce, Inc. currently maintains a balance of P20,000 in its current account. The current account earns interest of 2% per annum. The interest rate on the loan is 12% per annum. 1. What is the effective interest rate on the loan?On January 1, 20x1, Lawrence Lenders loaned $8.4 million to Wilkins Food Products, Inc. to purchase a frozen food storage facility. Wilkins signed a three-year, 4% installment note to be paid in three equal payments at the end of each year. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: Prepare the following for Lawrence Lenders:1. Prepare the journal entry for lending the funds on January 1, 20x1.2. Prepare an amortization schedule for the three-year term of the installment note.3. Prepare the journal entry for the first installment payment received on December 31, 20x1.4. Prepare the journal entry for the third installment payment received on December 31, 20x3.On January 1, 2024. Byner Company purchased a used tractor. Byner paid 55,000 down and signed a naninterest bearing note requiring 542, 000 to be paid on December 31, 2026 The fair value of the tractor is not determinable. An interest rate of 11% properly reflects the time value of money for this type of loan agreement. The company's fiscal year-end is December Note: Use tables, Excel, or a financial calculator. (FV of 51, PV of $1. FVA of S1, PVA of $1, FVAD of St and PVAD of $1) Required: Prepare the journal entry to record the acquisition of the tractor. How much interest expense will the company include in its 2024 and 2025 income statements for this note? What is the amount of the liability the company will report in its 2024 and 2025 balance sheets for this note?
- On January 2, 20X1, Criswell Acres purchased from Mifflinburg Farm Supply a new tractor that had a cash selling price of $109,837. As payment, Criswell gave Mifflinburg Farm Supply $25,000 in cash and a $100,000, five-year note that provided for annual interest payments at 6%. At the time of the sale, the interest rate normally charged to farms with Criswell's credit rating is 10%. Use the following links to the present value tables to calculate answers. (PV of 1, PVAD of 1, and PVOA of 1) (Use the appropriate factor(s) from the tables provided.) Required: 1. Prepare Mifflinburg Farm Supply's journal entry to record the sale. 2. Prepare the journal entry to record the first interest payment Mifflinburg Farm Supply received on December 31, 20X1. 3. Determine the note receivable balance that Mifflinburg Farm Supply will report on December 31, 20X2. 4. Determine Mifflinburg Farm Supply's note receivable balance on December 31, 2OX2, assuming that the company reports notes receivable at…On January 2, 2017, Criswell Acres purchased from Mifflinburg Farm Supply a new tractor that had a cash selling price of $109,837. As payment, Criswell gave Mifflinburg Farm Supply $25,000 in cash and a $100,000, five-year note that provided for annual interest payments at 6%. At the time of the sale, the interest rate normally charged to farms with Criswell's credit rating is 10%. Required: 1. Prepare Mufflinburg Farm Supply's journal entry to record the sale. 2. Prepare the journal entry to record the first interest payment Mifflinburg Farm Supply received on December 31, 2017. 3. Determine the note receivable balance that Mifflinburg Farm Supply will report on December 31, 2018. 4. Determine Mifflinburg Farm Supply's note receivable balance on December 31, 2018, assuming that the company reports notes receivable at fair value and the relevant rate of interest at that time has fallen to 8%. Assume that the December 31, 2018, interest payment has been made.Could you help me solve this accounting homework problem for me? and please show all your work so I can understand it On January 1, 2020, TPM Inc. acquires a piece of equipment for a list price of $300,000. It pays$20,000 immediately and writes a note for the remainder. Annual interest of 3% is due everyDecember 31st, and the principal of the note is payable in 6 years.TPM’s incremental borrowing rate is 6%, while the seller’s incremental borrowing rate is 7%.TPM is a public company. It depreciates its equipment using the diminishing balance method at15%. The equipment’s residual value is $40,000 at the end of its useful life. 1) Prepare all required journal entries for the years 2020 and 2021.2) Determine the Asset’s net book value on January 1, 2024.3) Determine the note payable carrying value on January 1, 2024.