A company offered a contest in which the winner would receive P 1,000,000, payable over twenty years. On December 31, 2021, the company announced the winner of the contest and signed a note payable to th winner for P 1,000,000, payable in P 50,000 installments every January 2. Also on December 31, 2021, the company purchased an annuity for P 498,250 tp provide the P 950,000 prize remaining after the first P 50,000 installment, which was paid on January 2, 2022. 1. On December 31, 2021, what amount should be reported as note payable- contest winner, net of current portion?

A company offered a contest in which the winner would receive P 1,000,000, payable over twenty years. On December 31, 2021, the company announced the winner of the contest and signed a note payable to th winner for P 1,000,000, payable in P 50,000 installments every January 2. Also on December 31, 2021, the company purchased an annuity for P 498,250 tp provide the P 950,000 prize remaining after the first P 50,000 installment, which was paid on January 2, 2022. 1. On December 31, 2021, what amount should be reported as note payable- contest winner, net of current portion?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 1PA: On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10%...

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Bart Company offered a contest in which the winner would receive P1,000,000 payable over twenty years. On December 31, 20x8, Bart Company announced the winner of the contest and signed a note payable to the winner for P1,000,000 payable in P50,000 installments every January 31. On December 31, 20x8,Bart Company purchased an annuity for P418,250 to provide the P950,000 prize remaining after the first P50,000 installment which was paid on January 31, 20x9. On December 31, 20x8, what amount should be reported as note payable-contest winner, net of current portion?
House Publishers offered a contest in which the winner would receive ₱1,000,000, payable over 20 years. On December 31, 2017, House announced the winner of the contest and signed a note payable to the winner for ₱1,000,000, payable in ₱50,000 installments every January 2. Also on December 31, 2017, House purchased an annuity for ₱418,250 to provide the ₱950,000 prize monies remaining after the first ₱50,000 installment, which was paid on January 2, 2018. In its 2017 income statement, what should House report as contest prize expense?
On January 1, 2018, the Montgomery Company agreed to purchase a building by making six payments. The firstthree are to be $25,000 each, and will be paid on December 31, 2018, 2019, and 2020. The last three are to be$40,000 each and will be paid on December 31, 2021, 2022, and 2023. Montgomery borrowed other money at a10% annual rate.Required:1. At what amount should Montgomery record the note payable and corresponding cost of the building onJanuary 1, 2018?2. How much interest expense on this note will Montgomery recognize in 2018?
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House Publishers offered a contest in which the winner would receive ₱1,000,000, payable over 20 years. On December 31, 2017, House announced the winner of the contest and signed a note payable to the winner for ₱1,000,000, payable in ₱50,000 installments every January 2. Also on December 31, 2017, House purchased an annuity for ₱418,250 to provide the ₱950,000 prize monies remaining after the first ₱50,000 installment, which was paid on January 2, 2018. In its December 31, 2017, balance sheet, what amount should House report as note payable-contest winner, net of current portion?
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