On January 1, 20X1 Blu Corporation acquired a building for P10M. The entity paid P1M down and signed a non-interest bearing note for the balance. Note is payable in 3 equal annual installment every Dec 31. Prevailing rate for the note of this type is 12%. REQUIRED: Journal entries to record the purchase of the building up to the settlement of the note. Prepare an amortization table. How should the note be presented in the statement of financial position at Dec 31, 20X1?
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On January 1, 20X1 Blu Corporation acquired a building for P10M. The entity paid P1M down and signed a non-interest bearing note for the balance. Note is payable in 3 equal annual installment every Dec 31. Prevailing rate for the note of this type is 12%.
REQUIRED:
Journal entries to record the purchase of the building up to the settlement of the note.- Prepare an amortization table.
- How should the note be presented in the
statement of financial position at Dec 31, 20X1?
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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 January 1, 20X1 Red Company acquired a building for P10M. The entity paid P1M down and signed a non-interest bearing note for the balance. Note is payable in 3 equal annual installment beginning Jan 1, 20X1. Prevailing rate for the note of this type is 12%. REQUIRED: Journal entries to record the purchase of the building up to the settlement of the note. Prepare an amortization table. How should the note be presented in the statement of financial position at Dec 31, 20X1?On January 1, 20X1 Grin Corporation acquired a building for P10M. The entity paid P1M down and signed a 3-year non-interest bearing note for the balance. Note is payable on due date. Prevailing rate for the note of this type is 12%. REQUIRED: Journal entries to record the purchase of the building up to the settlement of the note. How should the note be presented in the statement of financial position at Dec 31, 20X1?
- On January 1, 2020, South Company acquired a building for P5,000,000. The entity paid P500,000 down and signed a noninterest bearing note for the balance which is payable in 3 equal annual installments every December 31 of each year. The prevailing interest rate for a note of this type is 12%. The present valueof an ordinary annuity of 1 for three periods is 2.4018. Required: Prepare Journal entries to record purchase of building on January 1, 2020, first installment payment on December 31, 2020 and interest for 2020.At the beginning of 2018, VHF Industries acquired a machine with a fair value of $6,074,700 by issuing a fouryear, noninterest-bearing note in the face amount of $8 million. The note is payable in four annual installmentsof $2 million at the end of each year.Required:1. What is the effective rate of interest implicit in the agreement?2. Prepare the journal entry to record the purchase of the machine.3. Prepare the journal entry to record the first installment payment at December 31, 2018.4. Prepare the journal entry to record the second installment payment at December 31, 2019.5. Suppose the market value of the machine was unknown at the time of purchase, but the market rate of interestfor notes of similar risk was 11%. Prepare the journal entry to record the purchase of the machine.On January 1, 2020, South Company acquired a building for 5,000,000. The entity paid 500,000 down and signed a noninterest bearing note for the balance which is payable in 3 equal annual installments every December 31 of each year. The prevailing interest rate for a note of this type is 12%. The present value of an ordinary annuity of 1 for three periods is 2.4018. Required: 1. Prepare journal entries to record purchase of building on January 1, 2020, first installment payment on December 31, 2020 and interest expense for 2020.
- Kessel Company purchased a building and land with a fair market value of $525,000 (building, $275,000 and land, S250,000) on January 1, 2018. Kessel signed a 15-year, 10% mortgage payable. Kessel will make monthly payments of $5,641.68. Round to two decimal places. Explanations are not required for journal entries. Read the requirements. Requirement 1. Journalize the mortgage payable issuance on January 1, 2018. (Record debits first, then credits. Exclude explanations from any journal entries.) Date Accounts Debit Credit O Requirements 2018 Jan. 1 Building 275,000.00 Land 250,000.00 1. Journalize the mortgage payable issuance on January 1, 2018. 2. Prepare an amortization schedule for the first two payments. 3. Journalize the first payment on January 31, 2018. 4. Journalize the second payment on February 28, 2018. Mortgage Payable 525,000.00 Requirement 2. Prepare an amortization schedule for the first two payments. (Round all numbers f Beginning Principal Interest Total Ending Print…Keel Company purchased a building and land with a fair market value of $650,000 (building, $550,000 and land, $100,000) on January 1, 2018. Keel signed a 20-year, 8% mortgage payable. Keel will make monthly payments of $5,436.86. Round to two decimal places. Explanations are not required for journal entries. 1. Journalize the mortgage payable issuance on January 1, 2018. 2. Prepare an amortization schedule for the first two payments. 3. Journalize the first payment on January 31, 2018. 4. Journalize the second payment on February 28, 2018. Requirement 2. Prepare an amortization schedule for the first two payments. (Round all numbers to the nearest cent.) Beginning Principal Interest Total Ending Balance Payment Expense Payment Balance 1/1/2018 1/31/2018 2/28/2018Kessel Company purchased a building and land with a fair market value of $475,000 (building, $300,000 and land, $175,000) on January 1, 2018. Kessel signed a 25- year, 8% mortgage payable. Kessel will make monthly payments of 3,666.13. Round to two decimal places. Explanations are not for journal entries. Requirements 1. Journalize the mortgae payable issuance on January 1, 2018. 2. Prepare an amortization schedule for the first two payments. 3. Journalize the first payment on January 31, 2018. 4. Journalize the second payment on February 28, 2018
- On January 1, 2021, Palalay Bus Co. received a 4-year, noninterest bearing note of P1,000,000 in exchange for land with carrying amount of P400,000. The note is due on December 31, 2024. The effective interest rate is 12%. The present value of 1 at 12% for 4 periods is 0.6355.Requirements: 1. Prepare the amortization table. 2. Provide all the necessary journal entries.Kessel Company purchased a building and land with a fair market value of $525,000 (building, $275,000 and land, $250,000) on January 1, 2018. Kessel signed a 15-year, 10% mortgage payable. Kessel will make monthly payments of S5,641.68. Round to two decimal places. Explanations are not required for journal entries. Read the reguirements. Re X Jebits first, then credits. Exclude explanations from any journal entries.) Requirements dit 1. Journalize the mortgage payable issuance on January 1, 2018. 2. Prepare an amortization schedule for the first two payments. 3. Journalize the first payment on January 31, 2018. 4. Journalize the second payment on February 28, 2018. Print DoneKaler Company purchased a building and land with a fair market value of $600,000 (building, $400,000 and land, $200,000) on January 1, 2024. Kaler signed a 30-year, 13% mortgage payable. Kaler will make monthly payments of $6,637.20. Round to two decimal places. Explanations are not required for journal entries. Read the requirements. Requirement 1. Journalize the mortgage payable issuance on January 1, 2024. (Record debits first, then credits. Exclude explanations from any journal entries.) Date Accounts Debit Credit 2024 Jan. 1 Building 400,000.00 Land 200,000.00 Mortgage Payable 600,000.00 Requirement 2. Prepare an amortization schedule for the first two payments. (Round all numbers to the nearest cent.) Principal Payment Beginning Interest Total Ending Balance Expense Payment Balance 1/1/2024 $ 600,000.00 1/31/2024 $ 600,000.00 $ 6,500.00 $ 6,637.20 2/28/2024 Requirements 1. Journalize the mortgage payable issuance on January 1, 2024. 2. Prepare an amortization schedule for the…
