On January 1, 2021, Pindang Co. received a P1,000,000, noninterest bearing note in exchange land with carrying amount of P1,000,000. The note is due in four equal annual installments every December 31. The effective interest rate is 15%. The present value of ordinary annuity of 1 at 15% for 4 periods is 2.855 Requirements: 1. Prepare the amortization table. 2. Determine the current and non-current portions of the note on December 31, 2021. 3. Provide all the necessary journal entries.
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On January 1, 2021, Pindang Co. received a P1,000,000, noninterest bearing note in
exchange land with carrying amount of P1,000,000. The note is due in four equal annual installments every December 31. The effective interest rate is 15%. The present value of ordinary annuity of 1 at 15% for 4 periods is 2.855
Requirements:
1. Prepare the amortization table.
2. Determine the current and non-current portions of the note on December 31,
2021.
3. Provide all the necessary
Step by step
Solved in 4 steps
- On Jan. 1, 2021, Muta Co. received a P1,200,000, noninterest bearing note in exchange for land with carrying amount of P1,000,000. The note is due in three equal annual installments every Dec. 31. The effective interest rate is 15%. The present value of ordinary annuity of 1 at 15% for 3 periods is 2.2832Requirements: 1. Prepare the amortization table. 2. Determine the current and non-current portions of the note on December 31, 2021. 3. Provide all the necessary journal entries.On December 31, 2021, Bart Company purchased a machine from fell company in exchange for a noninterest bearing note requiring eight payments of P200,000. The first payments was made on December 31, 2021 and the other are due annually on December 31. At date of issuance, the prevailing rate of interest for this type of note was 11%. Present value factors are as follows: PV of an ordinary annuity of 1 at 11% for 8 periods 5.146 PV of an annuity of 1in advance at 11% at 8 periods 5.712 In the December 30, 2021 statement of financial position, what is the carrying amount of the note payable?On December 31, 2021, Boston Company purchased a machine from Helix Company in exchange for a noninterest bearing note requiring eight payments of P200,000. The first payment was made on December 31, 2021 and the others are due annually on December 31. At date of issuance, the prevailing rate of interest for this type of note was 11%. The PV of an ordinary annuity of 1 at 11% for 8 periods is 5.146, and the PV of an annuity of 1 in advance at 11% for 8 periods is 5.712. What is the interest expense for 2022?
- On Dec. 31, 2020, Boss Company purchased a machine from Len Company in exchange for a noninterest bearing note requiring three payments of P 800,000. The first payment was made on Dec. 31, 2020 and the others are due annually on Dec. 31. At the date of issuance, the prevailing interest rate for this note was 10%The PV of an ordinary annuity of 1 at 10% for 3 periods is 2.487 while the PV of an annuity in advance of 1 at 10% for 3 periods is 2.736. On Dec. 31, 2021, what is the carrying amount of the note payable? *a. P 1,388,800b. P 727,680c. P 1,388,560d. P 1,189,600On December 31, 2020, Bart Company purchased a machine in exchange for a noninterest bearing note requiring eight payments of P200,000. The first payment was made on December 31, 2020 and the others are due annually on December 31. At date of issuance, the prevailing rate of interest for this type of note was 11%. PV of an ordinary annuity of 1 at 11% for 8 periods 5.146 PV of an annuity of 1 in advamce at 11% for 8 periods at 5.712 1. What amount should be recorded at initial cost of the machine? 2. What is the discount on note payable on December 31, 2020? 3. What i sthe interest expense for 2021? 4. What is the carrying amount of note payable on December 31, 2021? i need answers for all 4 questions.On January 1, 2022, Cat Corporation sold goods to Rat Company. Rat Company signed a non-interest-bearing note requiring payment of P600,000 annually for seven years. The first paymentwas made on January 1, 2022. The prevailing rate of interest for this type of note at date ofissuance was 10%. PV of an ordinary annuity of 1 at 10% for 6 periods 4.36PV of an ordinary annuity of 1 at 10% for 7 periods 4.871. What is the amount of Sales Revenue credited on January 1, 2022?2. What is the carrying amount of note receivable on December 31, 2022?
- On December 31, 2019, Bart Company purchased a machine in exchange for anoninterest bearing note requiring eight payments 0 P200,000. The first payment was made on December 31, 2019 and the others are due annually on December 31. At date of issuance, theprevailing rate of interest for this type of note. was 11%. The present value of an ordinaryannuity of 1 at 11% for 8 periods is 5.146 and the present value of an annuity of 1 in advance at11% for 8 periods is 5.712 What is the carrying amount of note payable on December 31, 2020?On December 31, 2019, Bart Company purchased a machine in exchange for anoninterest bearing note requiring eight payments 0 P200,000. The first payment was made on December 31, 2019 and the others are due annually on December 31. At date of issuance, theprevailing rate of interest for this type of note. was 11%. The present value of an ordinaryannuity of 1 at 11% for 8 periods is 5.146 and the present value of an annuity of 1 in advance at11% for 8 periods is 5.7126) What amount should be recorded as the initial cost of the machine?7) What is the discount on note payable on December 31, 2019?8.) What amount should be reported as intereșt expense for 2020?9) What is the carrying amount of note payable on December 31, 2020?On December 30, 2021, JALINON Company sold a machine to GONZALES Company in exchange for a non-interest bearing note requiring ten annual payments of P10,000. GONZALES made the first payment on December 30, 2021. The market interest rate for similar notes at date of issuance was 8%. Information on present value factors is as follows: Period Present value of 1 at 8% Present value of ordinary annuity of 1 at 8% 9 0.50 6.25 10 0.46 6.71 38. In its December 31, 2021 statement of financial position, what amount should JALINON report as non-current portion of the note receivable?
- Begin Again Company sold an equipment with carrying amount of P2,000,000 and received a noninterest-bearing note requiring payment of P500,000 annually for 10 years. The first payment is due December 31, 2021. The prevailing rate of interest for this type of note at date of issuance is 12%. PV of 1 at 12% for 10 periods: 0.322 PV of ordinary annuity of 1 at 12% for 10 periods: 5.650 On December 31, 2020, what is the carrying amount of the note receivable? 5,000,000 2,175,000 1,610,000 2,825,000 What is the gain on sale of equipment to be recognized in 2020? 3,000,000 2,175,000 825,000On December 31, 20x1, DEF Company purchased a machine in exchange for a non-interest bearing note requiring eight payments of ₱200,000.The first payment was made on December 31, 20x1 and the others are due annually on December 31. At the date of issuance, the prevailing rate of interest for this type of note was 12%. PV of an ordinary annuity of 1 at 12% for 8 periods 4.968PV of an annuity of 1 in advance at 12% for 8 periods 5.564 Required:1. What amount should be recorded as initial cost of the machine?2. What is the discount on note payable on December 31, 20x1?3. What amount should be reported as interest expense for 20x2?4. What is the carrying amount of note payable on December 31, 20x2?On January 1, 2021, J Company sold equipment at a cost of P400,000. The consideration is a non interest bearing note. Related Data of the Note: The annual collection for three period is P200,000 payable every start of the year beginning January 1, 2021. The effective rate is 10%. The present value of an ordinary annuity of 1 for three periods at 10% is 2.4869. The present value of an anuity of 1 in advance for three periods at 10% is 2.7355. What is the unearned interest income on January 1, 2021?