On September 1, 2020, SMD Company borrowed P5,000,000, 10% interest-bearing note due in five years. On December 31, 2020, the fair value of the note is determined to be P4,350,000. The entity elected irrevocably the fair value option in measuring the note payable. What amount of gain/loss from change in fair value of the note payable should be reported for 2020?
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On September 1, 2020, SMD Company borrowed P5,000,000, 10% interest-bearing note due in five years. On December 31, 2020, the fair value of the note is determined to be P4,350,000. The entity elected irrevocably the fair value option in measuring the note payable. What amount of gain/loss from change in fair value of the note payable should be reported for 2020?
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- On January 1, 2019, Northfield Corporation becomes delinquent on a 100,000, 14% note to First National Bank, on which 16,651 of interest has accrued. On January 2, 2019, the bank agrees to restructure the note. It forgives the accrued interest, extends the repayment date to December 31, 2021, and reduces the interest rate to 10%. Required: Prepare a schedule for Northfield to compute the annual interest expense in regard to the preceding note for each year of the restructuring agreement.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 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. 6,000
- 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 September 1, 2020, SMD Company borrowed P5,000,000, 10%interest-bearing note due in five years. On December 31, 2020, the fairvalue of the note is determined to be P4,350,000. The entity electedirrevocably the fair value option in measuring the note payable. Whatamount of gain/loss from change in fair value of the note payable shouldbe reported for 2020? A. P1,250,000 gainB. P1,250,000 lossC. P650,000 gainD. P650,000 lossOn January 1, 2020, Jonathan Company borrowed P500,000 8% note due in four years. The present value of the note on the date of issuance was P367,500. The entity elected irrevocably the fair value option in measuring the note payable. On December 31, 2020, the fair value of the note is P408,150. 1. What is the carrying amount of the note payable on December 31, 2020? a. 500,000 b. 367,500 c. 408,150 d. 460,000 2. What amount should be reported as interest expense for 2020? a. 40,000 b. 29,400 с. 32,562 d. 20,000 3. What amount of gain from change in fair value of the note payable should be reported for 2020? а. 132,500 b. 172,500 91,850 d. 29,400 с. 4. At what amount should the discount on note payable be presented on December 31, 2020? a. 132,500 b. 103,100 91,850 d. с.
- On January 1, 2020, Victoria Company borrowed ₱600,000 8%, noninterest-bearing note due in four years. The present value of the note on January 1, 2020 was ₱441,000. The entity elects the fair value method for reporting financial liabilities. On December 31, 2020, the fair value of the note is ₱489,780. At what amount should the discount on note payable be presented on December 31, 2020?On January 1, 2020, Jonathan Company borrowed P500,000 8% note due in four years. The present value of the note on the date of issuance was P367,500. The entity elected irrevocably the fair value option in measuring the note payable. On December 31, 2020, the fair value of the note is P408,150 What is the carrying amount of the note payable on December 31, 2020? 500,000 367,500 408,150 460,000 What amount should be reported as interest expense for 2020? 40,000 29,400 32,562 20,000 What amount of gain from change in fair value of the note payable should be reported for 2020? 135,500 172,500 91,850 29,400 At what amount should the discount on note payable be presented on December 31, 2020? 132,500 103,100 91,850 0On July 1, 2018, ABC Company borrowed P1,000,000 on a 10% five-year note payable. OnDecember 31, 2018, the fair value of the note is determined to be P975,000 based on marketand interest factors. The entity has elected the fair value option for reporting the financialliability.Compute the following and show your solution:a. Interest expense for 2018b. carrying amount of the note payable on December 31, 2018
- On July 1, 2018, ABC Company borrowed P1,000,000 on a 10% five-year note payable. OnDecember 31, 2018, the fair value of the note is determined to be P975,000 based on marketand interest factors. The entity has elected the fair value option for reporting the financialliability.Compute the following and show your solution:c. gain or loss to be recognized in 2018 as a result of the fair value optiond. discount on note payable presented on December 31, 2018Mana Company had P5,000,000 note payable due on March 1, 2020. The entity borrowed P3,500,000 on February 1, 2020 which had a five-year term and used the proceeds to pay down the note and used other cash to pay the balance. The December 31, 2019 financial statements were issued on March 31, 2020. What amount of the note payable should be classified as noncurrent on December 31, 2019?On July 31, 2021, Sampaguita Company borrowed from a bank via issuing a 13.5% note. Transaction costs of P40,000 related to the borrowing was paid. The note was irrevocably designated at fair value for measuring purposes. Analyzing the changes in the fair value at yearend, P20,000 was attributable to credit risk.The net effects of the note are the following: P276,250 loss for the 2021 Income Statement and P256,250 loss on the 2021 Statement of Comprehensive Income. How much is the face value of the note?