A money market instrument purchased by the company with a face value of $300,000 will mature on October 15, 2021. In order to meet the financial obligations of the business, management has decided to liquidate the investment upon maturity. On that date quarterly interest computed at a rate of 5% per annum is also expected to be collected. What is the interest
Q: Precision Castparts, a manufacturer of processed engine parts in the automotive and airline…
A: Formulas that are used:- For Precision Castparts:- For Midwest Bank:-
Q: On December 31, 2020, JKL Bank granted a P5,000,000 loan to a borrower with 10% stated rate payable…
A: Face value of loan = P5,000,000 Stated interest rate = 10% Market interest rate = 12% The interest…
Q: The balance of cash surrender value of life insurance policy on the books of Paulo Corporation…
A: Insurance: It is the agreement between the insurance company which called insurer and person…
Q: Precision Castparts, a manufacturer of processed engine parts in the automotive and airline…
A: Notes receivables is an asset against which cash is receivable on maturity. Notes payable is a…
Q: Company is to make an annual principal payment of P600,000 for 5 years plus interest at 8%. The…
A: Impairment=Carrying value of loan-present value of cash flows
Q: Jake Marley, owner of Marley Wholesale, is negotiating with the bank for a $200,000, 90-day, 12…
A: Answer a)
Q: On December 31,2020, Sheridan Company signed a $1,228,500 note to Skysong Bank. The market interest…
A: A loan is a contractual relationship in which a creditor lends money to another company in exchange…
Q: On January 1, 2021, ABC Company sold machinery with carrying amount of P550,000 for P800,000, which…
A: Lease Liability shall be measured at Present value of future lease payments ROU Asset = Present…
Q: Xanax Inc expects the following transaction in 2020. Their first year of operations. ·…
A: Cash balance can be calculated by adding all proceeds and deducting all expenses. Proceed from sale…
Q: McCormick Corporation issued a 4-year, $40,000, 5% note to Greenbush Company on January 1, 2020, and…
A: Given: Note payable - 40,000 Due period - 4 years Stated interest rate - 5% Market interest rate -…
Q: Marin Inc. wishes to accumulate $1,360,000 by December 31, 2027, to retire bonds outstanding. The…
A: Given, Present value = $200000 FV= Future Value = FV=PV*(1+r)n PV = Present Value = $200000 r =…
Q: On January 1, 2021, Dreamlover Corporation purchased equipment from Daydream Company for P3,600,000.…
A: Present value refers to the current value of all the cash flows which is to be received in the…
Q: On June 30, 2021, the Johnstone Company purchased equipment from Genovese Corp. Johnstone agreed to…
A: I am answering the first question as per bartleby policies. Please re-submit the remaining questions…
Q: National Food Services, Inc., borrowed $4 million from its local bank on January 1, 2021, and issued…
A: Interest expense = Notes payable x interest rate = $4,000,000 x 10% = $400,000 Payment of principal…
Q: On December 31, 2019, Panda Bank recorded an investment of P5,000,000 in a loan granted to a client.…
A: Impairment losses arise when the present value is less than the carrying value. For example:…
Q: On May 1, 2022, Cuba Company purchased factory machinery having an installment price of P4,000,000.…
A: Cash price of equipment = Down payment + Present value of installments = P1,000,000 + (P4,000,000 -…
Q: ABC Company has a P10,000,000, two-year note payable to SHE Bank that matures October 31, 2021.…
A: solution : the correct answer is complete the refinancing agreement before october 31 2021…
Q: On February 10, 2010, after issuance of its financial statements for 2009, House Company entered…
A: GIVEN On February 10, 2010, after issuance of its financial statements for 2009, House Company…
Q: Smith Corporation borrowed $10 million to finance the construction of a new building. In addition to…
A: The borrowed loan will be shown in the 'Liabilities and owner's equity section of the balance sheet…
Q: Consider the following liabilities of Future Brands, Inc., at December 31, 2021, the company’s…
A: 1. Current liability—The requirement to classify currently maturing debt as a current liability…
Q: On January 1, 2020, Lily Co. sold machinery with historical cost of P6,000,000 and accumulated…
A: Working note: Computation of fair value of note receivable on January 1, 2020:
Q: John & Sarah Knight will commence trading in February 2021 with Capital of £60,000. They will spend…
A: Particulars February 2021 ($) March 2021 ($) April 2021 ($) Total Sales - 120000 120000…
Q: On April 1, 2021, ABC CO. issued a 9% interest bearing note with a face amount of P 30,000,000 for…
A: It is pertinent to note that non-current liabilities are those obligations that need to be paid…
Q: A company has assumed a debt of $45,000,000 to be paid in quarterly installments (at the end of each…
A: "Hii there, Thanks for posting the question. But as per Q&A guidelines, we must answer the…
Q: ABC Limited has a notes payable of $50,000 which will mature in five months. Management has both the…
A: Option B is the correct answer.
Q: At January 1, 2021, Brant Cargo acquired equipment by issuing a five-year, $150,000 (payable at…
A: Prepare the journal entry for Brant Cargo to record the purchase of the equipment. Date…
Q: X Corporation expects the following transaction in 2020. Their first year of operations. ·…
A: Solution: Cash balance at Dec 31, 2020 = Collections - Payments As this is first year of operations,…
Q: What is the interest income for 2022? Beach Bank loaned Boracay Company P7,500,000 on January 1,…
A: The term impairment refers to a situation when the fair value of the asset reduces below the…
Q: At December 31, 2020, Kisu Company’s liabilities include the following:A. P10 million of 10% notes…
A: Current liabilities are the company's short term financial obligations which are due within one year…
Q: On December 31, 2020, London Bank granted a P5,000,000 loan to a borrower with 10% stated rate…
A: Loan is described as an amount which is lent by the lender or financial institution to the borrower…
Q: On January 1, 2020, TPM Inc. acquires a piece of equipment for a list price of $300,000. It pays…
A: 1. Journal entries in the books of TPM Inc. Date Particulars Debit Credit 1-Jan-20 Property,…
Q: Marin Inc. wishes to accumulate $1,360,000 by December 31, 2027, to retire bonds outstanding. The…
A: Here, Accumulated Amount is $1,360,000 Deposit Amount is $200,000 Interest Rate is 8% Compounding…
Q: On January 1, 2021, ABC Company sold machinery with carrying amount of P550,.000 for P800,000, which…
A: Present value of lease liabilities = present value of lease payments made Since payment are made in…
Q: At the end of 2019, ABC has a balance in accounts receivable of $250,500. Of this amount, it is…
A: Given that the balance in accounts receivable of $250,500 Accounts receivable which are proved…
Q: On January 1, 2020, Caribou Explorations Limited (CEL) sold inventory costing $32,000 and, in…
A: Journal entry A journal entry is a record of the business transactions within the accounting books…
Q: X Corporation expects the following transaction in 2020. Their first year of operations. ·…
A: Here discuss about the details of calculation of ending cash balance while consider the total fact…
Q: Deem Holdings Inc had cash and cash equivalents at January 1, 2019 of P400,000. The transactions and…
A: Cash Flow Statement - Under Cash Flow, there are three types of activities involved - Operating…
Q: On January 1, 2020, Elmer Company, a calendar-year company, issued $2,000,000 of notes payable, of…
A: In case a portion of a debt is payable within next year, then that portion is reported as current…
Q: ABC Company sold an equipment with a carrying amount of P 750,000 on April 1,2020. ABC received a…
A: The carrying value of the note is calculated by discounting the future cash flows from the note at…
Q: A company acquires assets recorded at $240,000 by paying $120,000 cash and taking on a 12 year…
A: Loan =240000-120000=120000/24=$5000 So instalment $5000 semi annual…
Q: Pisbol Company sold an equipment with a carrying amount of $750,000 on April 1,2020. Pisbol received…
A: It is pertinent to note that here promissory note is recognized at Amortized cost since the…
Q: Precision Castparts, a manufacturer of processed engine parts in the automotive and airline…
A: Interest = Amount borrowed * Interest rate * months / 12
Q: On April 1, 2019, Flamengo Co. signed a one-year, 8% interest-bearing note payable for $50,000.…
A: Since you have asked multiple questions we will solve the first question for you as per the policy.…
Q: On December 31, 2021, Cholo Bank recorded an investment of P 5,000,000 in a loan granted to a…
A: Annual interest = Loan amount x interest rate x no. of year = P5,000,000 x 10% x 1 year = P500,000
Q: On January 1, 2019, Daisy company signed an agreement to operate as a franchisee for an initial…
A: Total amount of franchise = Present value of future installments + Down payment = Annual…
Q: On August 1, 2021, Stucko Company borrowed $21,000 on an 8-month, 3%, short-term note payable. Which…
A: Interest expense on note = Amount borrowed x rate of interest x no. of month /12 = $21,000 x 3% x…
Q: Red Company financing has a total assets of P500,000 and total liabilities of P300,000 at the end of…
A: The company has limited liability which means the shareholders are liable to the extent of…
Q: Pearl Inc. wishes to accumulate $1,352,000 by December 31, 2030, to retire bonds outstanding. The…
A: Time value of money is a concept which states that the worth of one unit of currency today is higher…
A
mature on October 15, 2021. In order to meet the financial obligations of the business,
management has decided to liquidate the investment upon maturity. On that date quarterly
interest computed at a rate of 5% per annum is also expected to be collected.
What is the interest?
Step by step
Solved in 3 steps
- What is the interest income for 2022? Beach Bank loaned Boracay Company P7,500,000 on January 1, 2019. The terms of the loan were payment in full on January 1, 2023 plus annual interest payment at 11%. The interest payment was made as scheduled on January 1, 2020. However, due to financial setbacks, Boracay Company was unable to make the 2021 interest payment. Beach Company considered the loan impaired and projected the cash flows from the loan on December 31, 2021. The bank accrued the interest on December 31, 2020, but did not continue to accrue interest for 2021 due to the impairment of the loan. The projected cash flows are: Date of cash flow Amount projected on December 31, 2021 December 31, 2022 December 31, 2023 500,000 1,000,000 December 31, 2024 2,000,000 December 31, 2025 4,000,000 The PV of 1 at 11% is 0.90 for one period, 0.81 for two periods, 0.73 for three periods, and 0.66 for four periods. a. 589,600 b. 534,600 O c. 825,000 O d. 599,456The management accountant at Miller Merchandising & More, Odail Russell is in the process of preparing the cash budget for the business for the fourth quarter of 2021. It is customary for the business to borrow money during this quarter. Extracts from the sales and purchases budgets are as follows: Cash Sales Sales On Account $640,000 $550,000 $600,000 $800,000 $500,000 Month Purchases August September $85,000 $70,000 $88,550 $77,160 $174,870 $420,000 $550,000 $500,000 $600,000 $450,000 October November December i) An analysis of the records shows that trade receivables are settled according to the following credit pattern, in accordance with the credit terms 4/30, n90: 50% in the month of sale 30% in the first month following the sale 20% in the second month following the sale ii) Expected purchases include monthly cash purchases of 5%. All other purchases are on account. Accounts payable are settled as follows, in accordance with the credit terms - 2/30, n60: 60% in the month in…On September 1, 2023, Cullumber Ltd. purchased equipment for $43,200 by signing a two-year note payable with a face value of $43,200 due on September 1, 2025. The going rate of interest for this level of risk was 7%. The company has a December 31 year end. (The tables in this problem are to be used as a reference for this problem.) Click here to view Table A.2 - PRESENT VALUE OF 1- (PRESENT VALUE OF A SINGLE SUM) Click here to view Table A.4 - PRESENT VALUE OF AN ORDINARY ANNUITY OF 1 (a) Your Answer Calculate the cost of the equipment, where necessary using any of the three methods (tables, financial calculator, or Excel), assuming the note is as follows: (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to O decimal places, e.g. 5,275.) 1. 2. 3. 1. 2. Correct Answer (Used) 3. An 7% interest-bearing note, with interest due each September 1. A 2% interest-bearing note, with interest due each September 1. A non-interest-bearing note. An 7% interest-bearing note A…
- On January 1, 2022, Ace Company finished landscaping services and accepted in exchange a 10% $400,000 promissory note with a due date of December 31, 2024. Interest is receivable at December 31 each year. Notes with similar risk have a market rate of interest of 5%. Set financial calculator to zero decimal place. Required: (a) Determine the value of the following: N = Answer 1 Question 4 I/Y = Answer 2 Question 4 PMT = $Answer 3 Question 4 FV = $Answer 4 Question 4 (b) The present value of the note was $Answer 5 Question 4 (c) Prepare a Schedule of Note Discount/Premium Amortization for Ace Company under the effective interest method. Ace Company Schedule of Note Discount/Premium Amortization Effective Interest Method Date Cash Interest Amortized Amount Carrying Value of Note Jan 1, 2022 $Answer 6 Question 4 Dec 31, 2022 $Answer 7 Question 4 $Answer 8 Question 4 $Answer 9 Question 4 Answer 10 Question 4 Dec 31,…To finance the purchase of the machine by issuing $6 million, six-year, zero interest-bearing note to the seller on 1 July 2019. The expected interest rate for the note is 5.5%. The company is expected to pay off the note in six $1 million instalments, at every financial year end. The company employs effective interest method. Assume financial year ends December. Calculate the instalment and interest.On January 1, 2022, Ace Company finished landscaping services and accepted in exchange a 10% $400,000 promissory note with a due date of December 31, 2024. Interest is receivable at December 31 each year. Notes with similar risk have a market rate of interest of 5%. Set financial calculator to zero decimal place. Required: (a) Determine the value of the following: N = _________________ I/Y = ___________________ PMT = ______________________ FV = $______________ (b) The present value of the note was $________________ (c) Prepare a Schedule of Note Discount/Premium Amortization for Ace Company under the effective interest method.
- ABC Limited has a notes payable of $50,000 which will mature in five months. Management has both the intent and the ability to refinance it by taking out a new loan of the same amount at the due date which would be due only after 5 years. How would this situation be reported in financial statements prepared as of today's date? A: The original notes payable of $50,000 is classified as current, with a footnote describing management's plan for refinancing. B: The original notes payable of $50,000 is classified as current and the new loan is reported as a long-term liability. C: The original notes payable of $50,000 is classified as long-term; the new loan of $50,000 is not included in liabilities at this date. D: The original notes payable of $50,000 need not be reported at all; only the new loan of $50,000 is reported as a long-term liability.Massy Store makes a $10,500 investment at Republic Bank Ltd on January 1, 2019. At the end of December 31, 2023, Massy Store is expected to accumulate an amount of $17166.25?i. Calculate the interest rate needed to procure this investment? ii. How long will it take for the initial amount invested to be doubled, given that interest is compounded annually at the rate in (i) above?On December 31, 2019, Panda Bank recorded an investment of P5,000,000 in a loan granted to a client. The loan has a 10% effective interest rate payable annually every December 31. The principal is due in full at maturity on December 31, 2022. Unfortunately, the borrower is experiencing significant financial difficulty and will have difficult time in making full payment. The bank projected that the entire principal will be paid at maturity and 4% interest or P200,000 will be paid annually on December 31 of the next three years. There is no accrued interest on December 31, 2019. The PV of 1 at 10% for three periods is 0.75, and the PV of an ordinary annuity of 1 at 10% for three period is 2.49. What is the loan impairment loss for 2019? A. P600,000 B. P752,000 C. P250,000 D. P748,000
- On January 1, 2022, Slack Company finished legal services and accepted in exchange a 5% $400,000 promissory note with a due date of December 31, 2024. Interest is receivable on January 1 of each year. Notes with similar risk have a market rate of interest of 10%. Set financial calculators to zero decimal place. Required: (a) Determine the value of the following: N = I/Y = PMT = FV = (b) The present value of the note was (c) Prepare a Schedule of Note Discount/Premium Amortization for Slack Company under the effective interest method.To finance the purchase of the machine by issuing RM6 million, six-year, zero interest-bearing note to the seller on 1 July 2019. The expected interest rate for the note is 5.5%. The company is expected to pay off the note in six RM1 million instalments, at every financial year end. The company employs effective interest method. Calculate the yearly instalment and interest. Assume financial year ends December.On January 1, 2022, Slack Company finished legal services and accepted in exchange a 5% $400,000 promissory note with a due date of December 31, 2024. Interest is receivable on January 1 of each year. Notes with similar risk have a market rate of interest of 10%. Set financial calculators to zero decimal place. Required: (a) Determine the value of the following: N = I/Y = PMT = $ FV = $
