On January 1, 2020, Molina Company sold a special machine that had a cash price of P900,000. The buyer paid P100,000 cash and signed a 4-year note. The note specified that it would be paid off in four equal annual payments of P274,565 each starting on December 31, 2020. The payments include 14% interest. 1. The carrying amount of the receivable on December 31, 2020 is
Q: Problem 9: Use the following information for the next five questions: On January 1, 2021, PITIFUL…
A: This question deals with the recognition of notes other concepts. As per the IAS 39 "Financial…
Q: 2. Chapter 3 Problem On January 1, 2020, John Jacob Dingleheimerschmidt borrowed $1,250.00 from the…
A: Given Principal=$1250 Number of payments=6 (quarterly) Interest=20% (compounded quarterly) The…
Q: 8) Camrey Company issued a five-year, interest-bearing note payable for $50,000 on January 1, 2013.…
A: First installment of principal paid on Jan 1, 2014 = $10,000 Seconf installment of principal to…
Q: Problem 8-16 On March 1, 2019, Alpha Company borrowed P1,000,000 and signed a 2 year note bearing…
A: Accrued interest is that interest amount which is, payable in this particular period, but it has,…
Q: QUESTION 3 Staples extends a lifetime replacement warranty on all its financial calculators. Using…
A: 1. Warranty expense a/c Dr. 2750 To Warranty liability a/c. 2750 (Being estimated…
Q: PROBLEM 16 GAMAY Corporation sold a machine on July 1, 2021. The cash price of the machine is…
A: The cash price of the machine=P79,000, out of which the company made a down payment of P10000 and…
Q: On January 1, 2021, Joy Company sold used equipment and received a non-interest bearing note…
A: Part 1) Journal Entry Date Particulars Amt(Dr) Amt(Cr) 01-01-2021 Customer A/c Dr 1652893…
Q: QUESTION 32 ABC Corporation borrows $12,000 cash on February 1. The loan has an annual interest rate…
A: Loan amount = $12,000 Interest rate = 9% Period = 10 Months
Q: Problem 10: Use the following information for the next three questions: On January 1, 2021, DELAY…
A: Since you has posted multiple questions we will answer the first question for you as per the…
Q: On January 1, 2022, De Vera Company loaned Dagpin Company amounting to P2,000,000 and received a…
A: De Vera company provided a loan to Dagpin company for P2000,000 against which De vera received a…
Q: 8. A man loans P 187,400 from a bank with interest at 5% compounded annually. He agrees to pay his…
A: We need to use loan amortization formula given below to calculate annual payment of loan. PMT…
Q: A 13.2% P600,000 note payable was issued by Robin Company on March 1, 2020. The principal and…
A: The current liability represents the amount that is payable within a year from the reporting date.…
Q: On June 20, 2016, Rolf Inc. borrowed $25,000 from its bank, signing an 8%, two-year note. Assuming…
A: Solution: The journal entry Rolf will record on each of the following dates: 1) Assuming that the…
Q: PROBLEM 4 On January 1, 2020, ABC Company sold a piece of land for P10,000,000. The company received…
A: The current value of the note is the present value of all the cash inflows received on the note…
Q: 4. What is the carrying amount of note pay able ot Problem 23-15 (AICPA Adapted) On December 31,…
A: Note is basically a debt instrument generally used for financing of Property plant and equipments.…
Q: Daayata Department Store wishes to discount two notes receivable arising from the sale of…
A: Proceeds from note = maturity value - discount Maturity value of note A = 50000 Proceeds from note…
Q: Problem 19 Marianne Company is a dealer in equipment. On December 31, 2019, Marianne Company sold…
A: Since the fair market value of the equipment and the fair market value of the note are not provided,…
Q: On January 1, 2020, a company buys a piece of equipment costing $666,633 with a 14% installment…
A: Journal entries are recording of the transaction in the accounting journal in a chronological order.…
Q: Question 28. Poar Corp. sells 1,000,000 tablet computers per year at a cost of $500.00 each. Every…
A: Hi student Since there are multiple questions, we will answer only first question.
Q: During 2020, Mann Company experienced financial difficulties and is likely to default on a…
A: Given information, Notes payable =P5,000,000 Accrued interest payable =P750,000 Cash settlement=…
Q: 62. A hospitality company is the maker of an $18,000 note to be paid in quarterly installments of…
A: Introduction: Balance sheet: All Assets and liabilities are shown in Balance sheet. It tells the net…
Q: Problem 25 Davao Bank loaned P7,500,000 to a borrower on January 1, 2018. The terms of the payment…
A: Loan Amount = P7,500,000 Interest Rate = 12% Accrued Interest = 12% of P7,500,000 = P900,000…
Q: On January 1, 2020, Bridgeport Company contracts to lease equipment for 5 years, agreeing to make a…
A: As per US GAAP, the implicit rate is known by the lessee. Therefore, implicit rate of 10% is used by…
Q: 8. On January 1, 2020, Susana Lopez signed a note to buy a used car. Her semi-annual payments of…
A: pleas see the next step for solution
Q: January 1, 2020, Bridgeport Company contracts to lease equipment for 5 years, agreeing to make a…
A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If…
Q: a) A bank offers to lend you K1,000 if you sign a note to pay K1,610.50 at the end of 5 years. What…
A: As multiple questions have been asked, only the first question will be answered as per the…
Q: Problem 7-7 (IAA) On December 31, 2020, Durable Bank has a loan receivable of P4,000,000 from a…
A: Calculation of present value is as follows: The resultant table is as follows:
Q: Problem 19 Marianne Company is a dealer in equipment. On December 31, 2019, Marianne Company sold…
A: Five annual payments = P 1000000 Market interest rate = 8% Note receivables is reported in Statement…
Q: EXERCISE 13 Pierce Corporation issues gift certificates in denominations of P 300, P 500 and P…
A: Gift certificates are the amount of gifts that are being sold to the customers. Revenue from these…
Q: A company pledged its entire accounts receivable amounting to P2,500,000 to a financing institution…
A: Pledged accounts refer to those accounts or assets against which a business organization borrow a…
Q: On January 1, 2021, Divino Company sold equipment with carrying amount of P800,000 to Jocelle…
A: Computation of Present Value of Notes Payable Year Interest @5% Cash Inflow PV Factor@10%…
Q: PROBLEM 13 LIGO Company has P3,000,000 note receivable from sale of plant bearing interest at 12%…
A: Notes receivable: It is a written document by which the other person promises to pay a certain…
Q: Problem 7-13 (IAA) On December 31, 2020, London Bank granted a P5,000,000 loan to a borrower with…
A: Part (1) Computation of Amount of Cash Paid to Borrower PV of all Interest (500000* 3.6)…
Q: PROBLEM 4: A note purchased for P100 000 .00 is due in 12 months at 10% simple interest . After 5…
A: A note is a promissory note that is used by the one party to pay agreed amount to the other party.…
Q: PROBLEM 5 On January 1, 2021, Son Co. Company purchased a machine for 300,000 in exchange for a…
A:
Q: On September 1,2019, Pine Company issued a note payable in the amount of P1,800,000, bearing…
A: Accrued interest payable on December 31,2020 = Face value of note payable x rate of interest x no.…
Q: "ROBLEM 15 In December 30, 2021, JALINON Company sold a machine to GONZALES Company in xchange for a…
A: An annuity refers to the series of payments or receipts lasting for some specific period of time.…
Q: 18.On January 1, 2021, REEDY SLENDER Co. purchased fixtures at an installment price of ₱520,000.…
A: Fixed assets means the assets which is used for many years in business and depreciated over the…
Q: Problem 9-12 (IAA) On April 1, 2020, Aljean Company discounted with recourse a 9-month, 10% note…
A: Date Particulars Debit (P) Credit (P) Cash…
Q: PROBLEM 8: On December 31, 2015, Park Bo Gum Co. sold used equipment with a carrying amount of…
A: Notes receivable are the asset of the firm where a borrower gives a written promise to lender to pay…
Problem 11
On January 1, 2020, Molina Company sold a special machine that had a cash price of P900,000. The buyer paid P100,000 cash and signed a 4-year note. The note specified that it would be paid off in four equal annual payments of P274,565 each starting on December 31, 2020. The payments include 14% interest.
1. The carrying amount of the receivable on December 31, 2020 is
Step by step
Solved in 4 steps
- Marathon Peanuts converts a $130,000 account payable into a short-term note payable, with an annual interest rate of 6%, and payable in four months. How much interest will Marathon Peanuts owe at the end of four months? A. $2,600 B. $7,800 C. $137,800 D. $132,600Problem 13 On January 1, 2020, Magbaril Company sold equipment with a carrying amount of P800,000 to Macud Company. As payment, Macud gave Magbaril Company a P1,200,000 note. The note bears an interest rate of 5% and is to be repaid in three annual installments of P400,000 (plus interest on the outstanding balance). The first payment was received on December 31, 2020. The prevailing rate of interest for a note of this type at January 1 was 10% and 9% on December 31. The gain on sale of equipment is The interest income to be recognized in 2021 isPROBLEM 8 On January 1, 2022, Clark Co. received a P3,000,000, 10% note from a customer upon the sale of its goods. The note is to be paid in six equal semi-annual installments, plus interest on the outstanding balance every June 30 and December 31, starting June 30, 2021. The effective rate on the note is 9%. 1. How much is the note upon initial recognition? 2. How much is the interest income recognized by Clark in 2022? 3. How much is the carrying amount of the note on December 31, 2023?
- Part XI: A Note Payable Carl's Candy Shop borrows $173,255 from Third Street Bank. This is a Note Payable, due in 4 years, with an annual interest rate of 6%. Interest is to be paid at the end of every year and the annual payment will also pay off some of the principal. The note was originated on January 1, 2021 and is due on December 31, 2024. The annual payment is $50,000. This covers both interest and principal. The number of periods is The annual interest rate is Complete the amortization table. Date 1/1/2021 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Totals Amortization Table for Carl's Candy Shop Periodic Payment Interest Expense % or A Decrease in Note Payable Show the journal entries necessary for the first year, 2021. 11 Book ValueProblem 10 On December 31, 2020, Olaer Company received two P5,000,000 notes receivable from customers in exchanged for consulting services rendered. On both notes, interest is calculated on the outstanding principal balance at the annual rate of 4% and payable at maturity. The note from Nazareno Corporation, made under customary trade terms, is due on October 1, 2021 and the note from Mudag Corporation is due on December 31, 2025. The market interest rate for similar notes on December 31, 2020 was 10%. The compound interest factors to convert future value into present value at 10% follow: present value of 1 due in nine months, 0.93, and present value of 1 due in five years, 0.62. 1. At what amounts should these two notes receivable be reported in Nazareno’s December 31, 2020 statement of financial position? 2. At what amounts should these two notes receivable be reported in Mudag’s December 31, 2020 statement of financial position?Problem 6 Luna Company discounted its own 2-year P500,000 12% interest bearing note at the bank onSeptember 1, 2020. The note was dated August 1, 2020. The discount rate was 15%. Preparethe journal entries relating to the said note starting September 1, 2020 until its payment.
- PART 1. SIMPLE INTEREST, SIMPLE DISCOUNT, PROMISSORY NOTE. a. What is the principal invested from June 10, 2020 which will amount to 50,000 on October 20, 2021 using 14.8% simple interest? b. Find the simple discount on 12,000 due at the end of 1 year and 6 months with 7.5% simple discount rate. How much is the proceeds? c. Five J’s company received a 100,00 promissory note at 10% simple interest for 9 months from one of its customers. After 6 months, the note was discounted at a bank at a discount rate 7.8%. How much did the company receive from the discounted note?Problem 27 On January 1, 2022, De Vera Company loaned Dagpin Company amounting to P2,000,000 and received a two-year, 6%, P2,000,000 note. The note calls for annual interest to be paid each December 31. De Vera collected the 2022 interest on schedule. However, on December 31, 2023, based on the Dagpin’s recent financial difficulties, De Vera expects that the 2023 interest, which was recorded in the books, will not be collected and that only P1,200,000 of the principal will be recovered. The P1,200,000 principal amount is expected to be collected in two equal installments on December 31, 2025 and December 31, 2027. The prevailing interest rate for similar type of note as of December 31, 2023 is 8%. What is the loan impairment loss to be recognized for the year 2023 How much is the interest income for the year 2025? The carrying amount of the loan as of December 31, 2026 is:25 A company purchases a piece of machinery by issuing a $300,000 five-year note payable. The stated and effective annual interest rates are both 6%, and monthly installment payments are $5,800. What is the balance in the Notes Payable account after two payments have been made? $288,400 O $291,379 $295,700 $300,000 NEXT > BOOKMARK
- QUESTION 3 On 1 September 2021, ABC Bhd used its receivables totalling RM 350,000 as collateral on a www 250,000, 15% note from CIMB Bank. ABC Bhd will contimue to collect the assigned receivables. CIMB Bank will charge 2% as a fimance charge which will be deducted in advance on the 250,000 value of the note. Collections of receivables for September is RM100,000,less cash discounts of RM800. On 1 October, ABC Bhd paid to the bank the amount owed for September collection plus accrued interest. During October, ABC Bhd collected the remaining accounts except for RM550 written off as uncollectible. On 1 November, ABC Bhd paid to CIMB Bank the remaining account owed plus accrued interest. REQUIRED: Prepare the joumal entries necessary for both ABC Bhd and CIMB Bank.information on a note receivable at december 31,2021 face amount P800,000 effective interest rate 14% 5. the note is due in lump sum in five years' time what is the carrying amount of the note at December 3, 2021? 6. the note is due in four annual installments. the first installment is due at the end of the year. what is the crrying amount of the note at December 31? 7. the noted is due in five equal annual installments. the first installments is due in advance. What is the carrying amount of the note at December 31, 2021?Problem 26 On January 1, 2021, Divino Company sold equipment with carrying amount of P800,000 to Jocelle Company. As payment, Jocelle gave Divino Company a P1,200,000 note. The note bears an interest rate of 5% and is to be repaid in three annual installments of P400,000 plus interest on outstanding balance. The first payment was received on December 31, 2021. The market price of the equipment is not readily determinable. The prevailing rate of interest for notes of this type is 10%. The interest income to be recognized in 2022 is: