On January 1,2021, ABC Corporation purchased a land for P 15,000,000. In exchange of the land, ABC issued a non-interest bearing note which is due on December 31,2025. There is no readily available market value for the building, but the current market rate of interest for comparable notes is 15% How much is the balance of Discount on notes payable as of December 31,2024?
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On January 1,2021, ABC Corporation purchased a land for P 15,000,000. In exchange of the land, ABC issued a non-interest bearing note which is due on December 31,2025. There is no readily available market value for the building, but the current market rate of interest for comparable notes is 15%
How much is the balance of Discount on notes payable as of December 31,2024?
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- On January 1,2021, ABC Corporation purchased a land for P 15,000,000. In exchange of the land, ABC issued a non-interest bearing note which is due on December 31,2025. There is no readily available market value for the building, but the current market rate of interest for comparable notes is 15%Assuming the notes was issued on June 1,2021, how much is the carrying value of the note as of December 31,2022?On January 1,2021, ABC Corporation purchased a land for P 15,000,000. In exchange of the land, ABC issued a non-interest bearing note which is due on December 31,2025. There is no readily available market value for the building, but the current market rate of interest for comparable notes is 15%How much is the carrying value of the notes to be shown on December 31,2023 Statement of financial position?On January 1,2021, ABC Corporation purchased a land for P 15,000,000. In exchange of the land, ABC issued a non-interest bearing note which is due on December 31,2025. There is no readily available market value for the building, but the current market rate of interest for comparable notes is 15%How much should be presented as non-current liabilities in the notes payable balance as of December 31,2021 in the statement of financial position?
- Fill in the blanks: On Jan 1, 2021, XYZ Co. sold a machine in exchange for a P1500,000, non-interest-bearing note receivable in a lump sum payment on December 31, 2024. The prevailing interest rate for this type of note is 10%. How much is the carrying amount of the note on January 1, 2021? How much is the unearned income on Dec 31, 2022? ( Previous Continue >On January 1, 2020, Shamrock Inc. bought land that had an assessed value of $390,000 at the time of purchase. A $560,000, non–interest-bearing note due on January 1, 2023, was given in exchange. There was no established exchange price for the land, and no ready market value for the note. The interest rate that is normally charged on a note of this type is 15%.Using (1) factor tables, (2) a financial calculator, or (3) Excel function PV, determine at what amount the land should be recorded at January 1, 2020. (Hint: Refer to Chapter 3 for tips on calculating.) Determine the interest expense to be reported in 2020 related to this transaction. Please show how to calculate in ExcelOn January 2, 2020, Janice Company sold equipment with a carrying amount of 400,000 in exchange for a 600,000 4-year non-interest-bearing note due January 2, 2024. There was no established exchange price for the equipment. The prevailing rate of interest for a note of this type at January 2, 2020 was 10%. What is the carrying value of the note receivable as of December 31, 2022 Statement of Financial Position?
- 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?On January 1, 2021, ABC Company sold property to the DEF Company. There was no established exchange price for the property, and DEF gave ABC a P2,000,000 non-interest bearing note payable in 5 equal annual installments of P400,000, with the first payment due December 31, 2021. The prevailing rate of interest for a note of this type is 9%.What should be the balance of the Discount on Notes Payable account on the books of ABC Company at December 31, 2022 after adjusting entries are made assuming that the effective interest method is used?On January 1, 2019, Bestbuy Inc. purchased land that had an assessed value of P6,000,000 at the time of purchase. AP9,000,000 non-interest-bearing note due January 1, 2021 was given in exchange. There was no established exchangeprice for the land, nor a ready market value for the note. The interest rate charged on a note of this type is 12%. The present value of 1 at 12% for 3 periods is 0.7118. The present value of an annuity of 1 at 12 % for 3 periods is 2.4018. In its December 31, 2019 balance sheet, what carrying amount should Bestbuy report as Note payable?a. P7,270,800 c. P8,070,048b. P7,174,944 d. P9,000,000
- On January 1, 2020, ABC Company sold property to the DEF Company. There was no established exchange price for the property, and DEF gave ABC a P2,000,000 non-interest bearing note payable in 5 equal annual installments of P400,000, with the first payment due December 31, 2020. The prevailing rate of interest for a note of this type is 9%.What should be the balance of the Discount on Notes Payable account on the books of DEF at December 31, 2021 after adjusting entries are made assuming that the effective interest method is used? A. P-0- B. P 444,139.49 C. P 187,482.13 D. P 304,112.05On January 1, 2020, ABC Company sold property to the DEF Company. There was no established exchange price for the property, and DEF gave ABC a P2,000,000 non-interest bearing note payable in 5 equal annual installments of P400,000, with the first payment due December 31, 2020. The prevailing rate of interest for a note of this type is 9%.What should be the balance of the Discount on Notes Payable account on the books of DEF at December 31, 2021 after adjusting entries are made assuming that the effective interest method is used? A. 0 B. 444,139.49 C.187,482.13 D. 304,112.05(Note Transactions at Unrealistic Interest Rates) On July 1, 2020, Taylor Inc. made two sales.1. It sold land having a fair market value of $500,000 in exchange for a 4-year, zero-interest-bearing promissory note in the face amount of $732,053.70. The land is carried on Taylor’s books at a cost of $375,000.2. It rendered services in exchange for a 4%, 8-year promissory note having a face value of $400,000 (interest payable annually).Taylor Inc. recently had to pay 7% interest for money that it borrowed from British National Bank. The customers in these two transactions have credit ratings that require them to borrow money at 10% interest.InstructionsRecord the two journal entries that should be recorded by Taylor Inc. for the sales transactions above that took place on July 1, 2020.