Financial statement effects of notes payable issued at discount. On January 1, 2004, Mason lent $40,000 to BillyBob Corp., accepting a $48,400, 2-year, non-interest- bearing note in exchange, with the principal due January 1, 2006. Required: what is the present value of the note on January 1, 2004? How much interest expense does BillyBob record in 2004 and in 2005? What is the value of the note payable on BillyBob's December 31, 2004, balance sheet? What is the amount of interest payable on BillyBob's December 31, 2004, balance sheet?

Financial statement effects of notes payable issued at discount. On January 1, 2004, Mason lent $40,000 to BillyBob Corp., accepting a $48,400, 2-year, non-interest- bearing note in exchange, with the principal due January 1, 2006. Required: what is the present value of the note on January 1, 2004? How much interest expense does BillyBob record in 2004 and in 2005? What is the value of the note payable on BillyBob's December 31, 2004, balance sheet? What is the amount of interest payable on BillyBob's December 31, 2004, balance sheet?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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The following interest-bearing.promissory note was discounted at a bank by the payee before maturity. Use the ordinary interest method, 360 days, to calculate the missing information. (Round dollars to the nearest cent.). Face Value: $1,280 Interest Rate : 7.7 Date of Note: Sept 18 Term of Note (days) : 130 Maturity Date : ? Maturity Value (in $) $? Date of Discount : Dec 11 Discount Period (days) : ? Discount Rate (%) : 11.2 Proceeds (in $): $? If you purchase $28,000 in U.S. Treasury Bills with a discount rate of 4.9% for a period of 26 weeks, what is the effective interest rate (as a %)? Round to the nearest hundredth percent.
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1. On December 31, 2020, what is the carrying value of the note received from Company B? 2. What should be the TOTAL carrying value of the notes on December 31, 2020?
Please provide correct solution
West County Bank agrees to lend Wildhorse Co. $472000 on January 1. Wildhorse Co. signs a $472000, 6%, 6-month note. What entry will Wildhorse Co. make to pay off the note and interest at maturity assuming that interest has been accrued to June 30? Notes Payable 486160 Cash 486160 Interest Payable 7080 Notes Payable 472000 Interest Expense 7080 Cash 486160 Notes Payable 472000 Interest Payable 14160 Cash 486160 Interest Expense 14160 Notes Payable 472000 Cash 486160
. On April 30, 2022, Lenny Inc. borrowed $10 million cash from Colonial Bank and issued a 5-month, noninterest-bearing note, priced to yield an effective interest rate of 10%. The stated discount rate on this loan is: A. More than the effective interest rate. B. Less than the effective interest rate. C. Equal to the effective interest rate. D. Unrelated to the effective interest rate
Max Corp. sold goods for $36,000 on July 17, 2020, and accepted a 12%, 90-day note. On August 1, the note was sold to a bank at a 15% discount rate. Required: a. Compute the proceeds. Assume a 360-day year. b. If the maker dishonored the note at maturity, prepare the entry for Max Corp. assuming $75 of bank protest fees. If an amount box does not require an entry, leave it blank.
Please solve with Explanation and do not Give image format
Non-Interest-Bearing Notes Payable On October 1, 2017, Valentino Company borrowed $18,800 from U.S. Best Bank by issuing a 12-month note. The bank discounted the note at 9%. Identify and analyze the effect of the payment of the note on October 1, 2018. How does this entry affect the accounting equation?If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Remember: if a contra account is increased, it will have the effect of decreasing the corresponding financial statement item. Round your answers to the nearest dollar.
Problem: (Computing the Proceeds from Discounted Notes) Determine the proceeds from each of the following discounted customer notes: a. An P8,000, 60-day, non-interest-bearing note discounted after 15 days at 12% b. A P12,000, 12% 60 day note discounted after 30 days at 14% c. A P6,000, 10% 90-day note discounted after 30 days at 12% d. A P10,000, 12% 120-day note discounted after 45 days at 15%. Please answer the questions above with correct solution and answer. Thank you.
On January 1, 2023, Karen Hong lent $64612 to Ben Bachu. A zero-interest-bearing note (face amount, $86000) was exchanged solely for cash; no other rights or privileges were exchanged. The note is to be repaid on December 31, 2025. The market rate of interest for a loan of this type is 10%. To the nearest dollar, and using the effective interest method, how much interest revenue should Ms. Hong recognize in 2023? $19383 $6461 $25800 ○ $8600
What maturity value of the note?

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