On January 1, 2020, Jonathan Company borrowed P500,000 8% note due in four years. The present value of the note on the date of issuance was P367,500. The entity elected irrevocably the fair value option in measuring the note payable. On December 31, 2020, the fair value of the note is P408,150 What is the carrying amount of the note payable on December 31, 2020?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

On January 1, 2020, Jonathan Company borrowed P500,000 8% note due in four years. The present value of the note on the date of issuance was P367,500.

The entity elected irrevocably the fair value option in measuring the note payable. On December 31, 2020, the fair value of the note is P408,150

  1. What is the carrying amount of the note payable on December 31, 2020?
  2. 500,000
  3. 367,500
  4. 408,150
  5. 460,000
  6. What amount should be reported as interest expense for 2020?
  7. 40,000
  8. 29,400
  9. 32,562
  10. 20,000
  11. What amount of gain from change in fair value of the note payable should be reported for 2020?
  12. 135,500
  13. 172,500
  14. 91,850
  15. 29,400
  16. At what amount should the discount on note payable be presented on December 31, 2020?
  17. 132,500
  18. 103,100
  19. 91,850
  20. 0

 

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education