lacobs Company borrowed $10,000 on a one-year, 8 percent note payable from the local bank on April 1. Interest was paid quarterly, and the note was repaid one year from the time the money was borrowed. Calculate the amount of cash payments Jacobs was required to make in each of the two calendar years that were affected by the note payable.
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- Halep Inc. borrowed $34,059 from Davis Bank and signed a 2-year note payable stating the interest rate was 8% compounded annually. Using the Present Value of an Annuity of 1 TABLE4, calculate the factor. Next, determine the annual payment amount. Then, determine the interest portion of the payment for year 1. Finally, determine the principal portion of the payment for year 1. Round to the nearest penny, two decimal places.Canliss Mining Company borrowed money from a local bank. The note the company signed requires five annual installment payments of $10,000 beginning one year from today. The interest rate on the note is 7%. What amount did Canliss borrow?Boyd Company has a line of credit with State Bank. Boyd can borrow up to $520,000 at any time over the course of the Year 1 calendar year. The following table shows the prime rate expressed as an annual percentage along with the amounts borrowed and repaid during Year 1. Boyd agreed to pay interest at an annual rate equal to 1 percent above the bank’s prime rate. Funds are borrowed or repaid on the first day of each month. Interest is payable in cash on the last day of the month. The interest rate is applied to the outstanding monthly balance. For example, Boyd pays 6 percent (5 percent + 1 percent) annual interest on $72,000 for the month of January. Month Amount Borrowed or (Repaid) Prime Rate for the Month January $ 72,000 5% February 52,000 5 March (46,000) 6 April through October No change No change November (36,000) 6 December (22,000) 5 Boyd earned $37,000 of cash revenue during Year 1.Required Prepare an income statement, balance sheetand statement of cash…
- Accounts receivable in the amount of $658,000 were assigned to the Fast Finance Company by Sunland, Inc., as security for a loan of $564,000. The finance company assessed a 4% finance charge on the face amount of the loan, and the note bears interest at 8% per year.During the first month, Sunland collected $366,600 on assigned accounts. This amount was remitted to the finance company along with one month's interest on the note.Make all the entries for Sunland Inc. associated with the transfer of the accounts receivable, the loan, and the remittance to the finance company. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,275.) Account Titles and Explanation Debit Credit (To record the transfer of the accounts receivable.) (To record the loan amount…On January 1, YR01, Toyota Co. issued a two-year $1,000 note payable. The note bears interest of 7% paid yearly each December 31st. In addition, the principal amount will be paid back in two installments as follows: $400 will be paid back with the interest payment on December 31, YR01 and $600 will be paid back with the interest payment on December 31, YR02. At the date the note was issued, the market rate for similar notes payable was 6%. What is the present value of the note payable at the issue date of January 1, YR01 (assume an annual discounting period and round your final answer to the nearest penny)? a. $1,000.00 b. $1,014.77 c. $1,026.25 d. $ 1, 103.23 e. None of the answers provided are correctCompany G borrowed $10,000 on November 1. The note has an interest rate of 8% and a term of 120 days. What is the amount of interest expense Company G should record on 12/31 of the first year? (Use 360 days a year.)
- Colson Company has a line of credit with Federal Bank, Colson can borrow up to $386,000 at any time over the course of the calendar year. The following table shows the prime rate expressed as an annual percentage along with the amounts borrowed and repaid during the first four months of the year. Colson agreed to pay interest at an annual rate equal to 2.50 percent above the bank's prime rate. Funds are borrowed or repaid on the first day of each month. Interest is payable in cash on the last day of the month. The interest rate is applied to the outstanding monthly balance. For example, Colson pays 6.25 percent (3.75 percent + 2.50 percent) annual interest on $81,000 for the month of January. Month January February March April Amount Borrowed or (Repaid). $ 81,000 117,900 (24,400) 27,600 Required a. Compute the amount of interest that Colson will pay on the line of credit for the first four months of the year. b. Compute the amount of Colson's liability at the end of each of the first…acobs Company borrowed $10,000 on a one-year, 8 percent note payable from the local bank onApril 1. Interest was paid quarterly, and the note was repaid one year from the time the money was borrowed. Calculate the amount of cash payments Jacobs was required to make in each of the two calendar years that were affected by the note payable.On January 1, $50,000 cash is borrowed from a bank in return for a 6% installment note with 24 monthly payments of $2,216 each. 1. Prepare the journal entry to record the issuance of the note.2. Prepare the journal entry to record the first monthly interest payment.
- On January 1, year 8 Harper Co. finances the purchase of equipment by issuing a $15,000 non-interest-bearing note payable. The note will be paid off in 10 equal annual installments beginning on December 31, year 8. The market rate of interest for notes of this type is 5%. Considering the information below, at what amount should Harper Co. report the equipment on its balance sheet dated December 31, year 8? The present value of $1 at 5% for 10 periods 0.61391 The present value of an ordinary annuity of $1 at 5% for 10 periods 7.72173 The present value of an annuity due of $1 at 5% for 10 periods is 8.10782 8.10782Boyd Company has a line of credit with State Bank. Boyd can borrow up to $500,000 at any time over the course of the Year 1 calendar year. The following table shows the prime rate expressed as an annual percentage along with the amounts borrowed and repaid during Year 1. Boyd agreed to pay interest at an annual rate equal to 1 percent above the bank's prime rate. Funds are borrowed or repaid on the first day of each month, Interest is payable in cash on the last day of the month. The interest rate is applied to the outstanding monthly balance. For example, Boyd pays 6 percent (5 percent +1 percent) annual interest on $70,000 for the month of January. Amount Borrowed or (Repaid) $ 70,000 50,000 (42,000) No change (30,000) (20,000) Boyd earned $35,000 of cash revenue during Year 1. Month January February March April through October November December Income Statement Required Prepare an income statement, balance sheet, and statement of cash flows for Year 1. Service revenue Expenses…Franklin Company obtained a $110,000 line of credit from the State Bank on January 1, Year 1. The company agreed to accept a variable interest rate that was set at 2% above the bank's prime lending rate. The bank's prime rate of interest and the amounts borrowed or repaid during the first three months of Year 1 are shown in the following table. Assume that Franklin borrows or repays on the first day of each month. Borrowing is shown as a positive amount and repayments are shown as negative amounts indicated by parentheses. 1-January 1-February 1-Marchi Amount Borrowed Prime Rate for the Month 4.08 4.58 5.08 Based on this information alone, the amount of interest expense recognized in March would be closest to: (Do not round intermediate calculations. Round your answer to the nearest whole number.) Multiple Choice $177, $309. (Repaid) $ 32,000 (11,000) 32,000 $199.