5. BE6-08 Zero-interest note Dold Acrobats lent $16,529 to Donaldson, Inc., accepting Donaldson's 2-years, $20,000, zero-interest- bearing note. The implied interest rate is 10%. Amortization Table Date Cash Interest Interest Revenue Discount Amortization Discount Balance Carrying Value Date Account Debit Credit 01/01/Y1 (To record the initial transactions) 01/01/Y1 (To record the recognition of interest in year one) 12/31/Y1 12/31/Y2 (To recognize the interest in year 2) T

5. BE6-08 Zero-interest note Dold Acrobats lent $16,529 to Donaldson, Inc., accepting Donaldson's 2-years, $20,000, zero-interest- bearing note. The implied interest rate is 10%. Amortization Table Date Cash Interest Interest Revenue Discount Amortization Discount Balance Carrying Value Date Account Debit Credit 01/01/Y1 (To record the initial transactions) 01/01/Y1 (To record the recognition of interest in year one) 12/31/Y1 12/31/Y2 (To recognize the interest in year 2) T

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On. Nov. 14, 20x1, Athena Co. sold its P30,000 loan receivable from Zevrek Co. to Devin Bank for P28,000. The sale agreement requires Athena Co. to repurchase the loan at a future date for P28,000 plus interest based on the current market rate on repurchase date. Requirement: Provide the journal entry on Nov. 14, 20x1.
Instructions Prepare all necessary entries in general journal form for Garfield Corp. E6.13 (LO 4) (Note Transactions at Unrealistic Interest Rates) On July 1, 2025, Agincourt Inc. made two sales. 1. It sold land having a fair value of $700,000 in exchange for a 4-year zero-interest-bearing promissory note in the face amount of $1,101,460. The land is carried on Agincourt's books at a cost of $590,000. 2. It rendered services in exchange for a 3%, 8-year promissory note having a face value of $400,000 (interest payable annually). Agincourt Inc. recently had to pay 8% 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 12% interest. ធ
Fox Co. purchases land on January 1 of Year 1 and issues a 3-year, $70,000 zero-interest-bearing note as payment. The market rate is 10%, and Fox Co. uses the effective interest method to amortize discounts and premiums. Required Stated Interest = 0% e. Repeat the requirements of parts a, b, and c with the stated interest on the note as 5%. e. (part a: prepare a debt amortization schedule for the note) • Note: Round your answers to the nearest whole dollar. Do not use negative signs with your answers. Date Jan. 1, Year 1 Dec. 31, Year 1 $ Dec. 31, Year 2 Dec. 31, Year 3 Stated Rate = 5% $ Cash 3,500 $ 3,500✔ 3,500 ✓ 10,500 $ Interest Expense Discount Amortization 7,000 * $ 7,000 x 7,000 X 21,000 $ 0x 7,000 x 1,167 X 8,167 Note Payable, Net 50,937 x 0x 0 x 1,167 $ e. (Part b: prepare the entry for issuance of the note in exchange for land on January 1 of Year 1)
On Jan 1, 20X1 ABC received a P1,200,000 3-year non interest note. Interest and principal is collectible on due date. How much is the maturity value? 120,000 360,000 1,200,000 1,560,000
On January 1, 20x1, PRISM Co. acquired machinery by issuing a 3-year, P1,200,000 noninterest-bearing note payable due as follows: Date Amount of installment December 31, 20x1 600,000 December 31, 20x2 400,000 December 31, 20x3 200,000 TOTAL 1,200,000 The prevailing rate of interest for this type of note is 10%. How much is the carrying amount of the note on December 31, 20x1? Select the correct response: 867,312 1,026,296 528,926 489,762
15. On January 1, 200A, ABC rendered services to XYZ at a price of P450,000. ABC received P500,000 5-year promissory note from XYZ to be paid in full on December 200E. Assume the use of straight line method to amortized any premium or discount on note receivable, the total amount of income ABC realized from this transaction for 200A would be
Entries for TS: Effective Interest Method Note: When answering the following questions, round answers to the nearest whole dollar. Amortization Schedule Journal Entries in Year 1, Journal Entries in Year 2 d. Record the receipt of interest on January 1 of Year 2. e. Record the sale of all of the bonds on January 2 of Year 2 for $166, 100. f. Record the adjustment to the Fair Value Adjustment account on December 31 of Year 2, assuming no additional TS investments.
Prepare all necessary entries in general journal form for Garfield Corp. E7.13 (LO 4) (Note Transactions at Unrealistic Interest Rates) On July 1, 2020, Agincourt Inc. made two sales. 1. It sold land having a fair value of $700,000 in exchange for a 4-year zero-interest-bearing promissory note in the face amount of $1,101,460. The land is carried on Agincourt’s books at a cost of $590,000. 2. It rendered services in exchange for a 3%, 8-year promissory note having a face value of $400,000 (interest payable annually). Agincourt Inc. recently had to pay 8% 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 12% interest. Instructions Record the two journal entries that should be recorded by Agincourt Inc. for the sales transactions above that took place on July 1, 2020.
The company purchased the equipment 600,000. The interest rate of bank is 12,400. The loan is denominated in OMR, matures on March 31 2019. The spot rate of OMR 2.50. What is the value of interest expenses? Select one: a. None of the other points b. OMR 12,400 c. OMR 1,500,000 d. OMR 31,000
The company purchased the equipment 600,000. The interest rate of bank is 12,400. The loan is denominated in OMR, matures on March 31 2019. The spot rate of OMR 2.50. What is the value of interest expenses?Select one:a. OMR 12,400b. OMR 1,500,000c. OMR 31,000d. None of the other points
3. What is the carrying amount of the modified note payable P500,000. The entity is granted by the creditor in a debt note payable of P5,000,000 and accrued interest payable of On January 1, 2021, Kingdom Company had an crerdue 10% note payable of P5,000,000 and accrued interest payable : restructuring agreement the following concessions: a. Accrued interest of P500,000 is forgiven. b. The new interest rate is 14% payable annually every December 31. c. The new maturity date of the note is December 31, 2024. d. The entity paid P290,000 to the creditor as arrangement fee or modification cost. e. Considering the effect of the modification cost or arrangement fee, the new'effective interest rate is 12%. f. The market rate of interest for similar note is 9%. 9% 10% 12% PV of 1 for 4 periods PV of an ordinary annuity of 1 for 4 periods 0.71 0.68 0.64 3.24 3.17 3.04 1. What amount of loss on modification should be recognized for 2021? 409,000 b. 119,000 291,000 d. а. с. 2. What amount should…
On Janaury 1, 2021, ABC Company acquired equipment by issuing a 3-year, P4,800,000 non-interest bearing note due in semi-annual payment starting July 1, 2021. The prevailing rate of interest of this type of note is 10%. (PVF 5 decimal) How much is the carrying amount of the note on INITIAL recognition?a. 4,060,552b. 4,000,000c. 3,980,342d. 3,786,309 How much is the CARRYING amount of the note on December 31, 2021?a. 3,463,580b. 3,343,341c. 2,836,760d. 2,279,830