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% At what amount should the note be recorded on January 1, 2021?
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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%
At what amount should the note be recorded on January 1, 2021?
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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 balance of Discount on notes payable as of December 31,2024?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%Assuming the notes was issued on June 1,2021, how much is the interest expense for year 2022?On January 1,2021, XYZ 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?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 interest expense for the year 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 should be presented as non-current liabilities in the notes payable balance as of December 31,2021 in the statement of financial position?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 ExcelPresented below are two independent situations. a. On January 1, 2020, Wright Inc. purchased land that had an assessed value of $350,000 at the time of purchase. A $550,000, zero-interest-bearing note due January 1, 2023, was given in exchange. There was no established exchange price for the land, nor a ready fair value for the note. The interest rate charged on a note of this type is 12%. Determine at what amount the land should be recorded at January 1, 2020, and the interest expense to be reported in 2020 related to this transaction. b. On January 1, 2020, Field Furniture borrowed $5,000,000 (face value) from Sinise Co., a major customer, through a zero-interest-bearing note due in 4 years. Because the note was zero-interest-bearing, Field Furniture agreed to sell furniture to this customer at lower than market price. A 10% rate of interest is normally charged on this type of loan. Prepare the journal entry to record this transaction and determine the amount of interest expense…
- 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. P9,000,000On 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, Hornets Company sold land that originally cost P400,000 to Egi Company. As payment, Egi gave Hornets a P600,000 note. The note bears an interest rate of 8% and is to be repaid in three annual installments of P200,000 plus interest on the outstanding balance. The first payment is due on December 31, 2021. The market price of the land is not reliably determinable. The prevailing interest rate for notes of this type is 8%. How much is the interest revenue for the year 2022?