On January 1, 2019, James Co. received a 10%, five year note from a customer.Interest is paid every December 31. The note has a face value of P12,000,000. Theeffective rate on the date of the receipt of the note was 12%1. Determine the initial amount of the note.2. Prepare an amortization table to show the balance of the note at the end of eachreporting period from 2019 to 2023.3. Compute for the interest income recognized by James during each period from 2019to 2023.On January 1, 2019, Frank Co. received a 14%, three-year note from a customer.The interest on the note is paid every June 30 and December 31. The note has a facevalue of P1,000,000. The effective rate applicable on the note is 12%.1. Determine the initial amount of the note.2. Prepare an amortization table to show the balance of the note at the end of eachreporting period from 2019 to 2021.3. Compute for the interest income recognized by Frank during each period from 2019to 2021.

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On January 1, 2019, James Co. received a 10%, five year note from a customer. Interest is paid every December 31. The note has a face value of P12,000,000. The effective rate on the date of the receipt of the note was 12% 1. Determine the initial amount of the note. 2. Prepare an amortization table to show the balance of the note at the end of each reporting period from 2019 to 2023. 3. Compute for the interest income recognized by James during each period from 2019 to 2023.

On January 1, 2019, James Co. received a 10%, five year note from a customer. Interest is paid every December 31. The note has a face value of P12,000,000. The effective rate on the date of the receipt of the note was 12% 1. Determine the initial amount of the note. 2. Prepare an amortization table to show the balance of the note at the end of each reporting period from 2019 to 2023. 3. Compute for the interest income recognized by James during each period from 2019 to 2023.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter9: Current Liabilities And Contingent Obligations

Section: Chapter Questions

Problem 2P: Notes Payable and Effective Interest On November 1,2019, Edwin Inc. borrowed cash and signed a...

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On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10% interest rate. Each annual payment is in the amount of $39,569 and payment is due each Dec. 31. What is the journal entry on Jan. 1 to record the cash received and on Dec. 31 to record the annual payment? (You will need to prepare the first row in the amortization table to determine the amounts.)
On January 1, 2019, Northfield Corporation becomes delinquent on a 100,000, 14% note to First National Bank, on which 16,651 of interest has accrued. On January 2, 2019, the bank agrees to restructure the note. It forgives the accrued interest, extends the repayment date to December 31, 2021, and reduces the interest rate to 10%. Required: Prepare a schedule for Northfield to compute the annual interest expense in regard to the preceding note for each year of the restructuring agreement.
Arvan Patel is a customer of Banks Hardware Store. For Mr. Patels latest purchase on January 1, 2018, Banks Hardware issues a note with a principal amount of $480,000, 13% annual interest rate, and a 24-month maturity date on December 31, 2019. Record the journal entries for Banks Hardware Store for the following transactions. A. Note issuance B. Subsequent interest entry on December 31, 2018 C. Honored note entry at maturity on December 31, 2019.
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Flipco signed a 10-year note payable on January 1, 2018, of $800,000. The note requires annual principal payments each December 31 of $80,000 plus interest at 5%. The entry to record the annual payment on December 31, 2019, includes a. a debit to Interest Expense for $36,000. b. a debit to Interest Expense for $40,000. c. a credit to Notes Payable for $80,000. d. a credit to Cash of $120,000.
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