The company issues a note to an entity to borrow cash for five years and will pay $500,000 to the entity at the end of the fifth year but not pay any interest. If the annual market interest rate is 4%, please calculate the present value of the note (compounded annually and rounded to the nearest dollar).
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3a)
- The company issues a note to an entity to borrow cash for five years and will pay $500,000 to the entity at the end of the fifth year but not pay any interest. If the annual market interest rate is 4%, please calculate the present value of the note (compounded annually and rounded to the nearest dollar).
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- If Bergen Air Systems takes out a $100,000 loan, with eight equal principal payments due over the next eight years, how much will be accounted for as a current portion of a noncurrent note payable each year?Lime Co. incurs a $4,000 note with equal principal installment payments due for the next eight years. What is the amount of the current portion of the noncurrent note payable due in the second year? A. $800 B. $1,000 C. $500 D. nothing, since this is a noncurrent note payableChemical Enterprises issues a note in the amount of $156,000 to a customer on January 1, 2018. Terms of the note show a maturity date of 36 months, and an annual interest rate of 8%. What is the accumulated interest entry if 9 months have passed since note establishment?
- 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, 20x1, an entity obtains an 11%, P5,000,000 bank loan. The bank charges the entity an 8.74% nonrefundable loan origination fee. The principal on the loan matures on December 31, 20x4 but interest is due annually every December 31. Requirements: Compute for the initial carrying amount of the loan. Compute for the effective interest rate on the loan. Compute for the carrying amount of the loan on December 31 20x1.3a) The company issues a note to an entity to borrow cash for five years and will pay $500,000 to the entity at the end of the fifth year but not pay any interest. If the annual market interest rate is 4%, please calculate the present value of the note (compounded annually and rounded to the nearest dollar). 3b) Based on Part 1, if the company will pay $500,000 at the end of the fifth year and interest $25,000 at the end of each of the five years, please calculate the present value of the note (rounded to the nearest dollar). 3c) Based on Part 1, if the company will pay $500,000 at the end of the fifth year and interest $25,000 at the end of each of the last four years (the second to fifth years), please calculate the present value of the note (rounded to the nearest dollar).
- Sterling Inc. has two long-term notes outstanding. One is a five-year note for $50,000. An equal amount of principal must be repaid each year of the loan. The other is a seven-year note for $210,000. In the next calendar year, the company will pay $21,000 of the principal. What is total amount of the notes that will be reported as current liabilities on its balance sheet? Oa. $229,000 Ob. $31,000 Oc. $71,000 Od. $40,000Bull City Industries is considering issuing a $100,000, 7% note to a creditor on account. Assume a 360-day year. For a compound transaction, if an amount box does not require an entry, leave it blank. a. If the note is issued with a 45-day term, journalize the entries to record: the issuance of the note. the payment of the note at maturity. b. If the note is issued with a 90-day term, journalize the entries to record: the issuance of the note. the payment of the note at maturity.Drake Corporation takes out a term loan payable in 12 year-end annual installments of P5,000 each. The interest rate is 14 percent. (a) What is the amount of the loan? (b) what is the loan balance at the end of year 2? CHOOSE THE LETTER OF ANSWERA. (a)P27,301.50 and (b) P26,080.63B. (a)P15,301.50 and (b) P26,080.63C. (a)P26,301.50 and (b) P26,080.63D. (a)P25,301.50 and (b) P26,080.63E. None of the above
- On 1 January 2022, Rodney Inc. provided services to Smith Co. in exchange for Smith’s $300,000, 2-year 8% note with interest compounded semi-annually on July 1 and January 1. The current market rate of similar notes is 12%. Rodney Inc. financial year ends December 31. REQUIRED: 1. Provide the following input values from your financial calculator: N = I/Y = PMT = FV = 2. The note was issued at = 3. The present value of the note is =On 1/1/X1, Caldwell Corp. borrowed $450,000 by agreeing to a 9%, 9-year installment note with the bank. The note's proceeds will eventually be used to purchase a building. The journal entry to record the note is already shown in the journal below. The note will be paid back in nine equal annual installment payments of $ 75,059 on December 31 of each year beginning December 31, 20X1. Required: Using the above information, prepare the journal entries to record the first and second installment payments due on 12/31/X1 and 12/31/X2, respectively. Note: Round all calculations to the nearest whole dollar. Do not use currency symbols, commas or decimal points in your responses. Date Account Name Debit Credit 1/1/X1 Cash 450,000 Note Payable 450,000 12/31/X1 12/31/X2On January 1, 2021, Oceanic Bank made a P1,000,000, 8% loan. The P80,000 interest is receivable at the end of each year, with the principal amount to be received at the end of five years. At the end of 2021, the first year's interest of P80,000 has not yet been received because the borrower is experiencing financial difficulties. The borrower negotiated a restructuring of the loan. The payment of all of the interest for 5 years will be delayed until the end of the 5- year loan term. In addition, the amount of principal repayment will be dropped from P1,000,000 to P500,000.The PV of 1 at 8% for 4 periods is .735. No interest revenue has been recognized in 2021 in connection with the loan. What is the loan impairment loss on December 31, 2021? a. 338,500 O b. 238,500 c. 388,000 O d. 288,000