The Problem 24-6 (IAA) Zephyr Company is provided a grant by a foreign governme for. the purpose of acquiring land for a building site grant is a zero-interest loan for 5 years evidenced hu promissory note. The loan was granted on January 1, 2020 for P8,000;000, The market rate of interest is 6%. The present value of 1 for fiv periods at 6% is .7473. Required: Prepare journal entries for 2020 and 2021.
Q: Brilliant Company sold a franchise to sell its products for P5,000,000 on January 1, 2021. The…
A: The revenue to be recognized would be annual amount of installment fee and the commission to be paid…
Q: Zephyr Company is provided a grant by a foreign government for the purpose of acquiring land for a…
A: Working note: Computation of carrying amount of loan on January 1, 2021: Carrying amount of…
Q: Molave Company had the following outstanding loans during 2021 and 2022. Specific construction loan…
A: Borrowing cost means where the assets like building , take substantial time to build , then interest…
Q: 23. On January 1, 2020, ENERVATE TO WEAKEN Company had the following borrowings made for general…
A: Borrowing cost means where the assets like building , take substantial time to build , then interest…
Q: Problem #4: Kirk & Spock Company borrowed $100,000 from Bank Trust to finance the purchase of fixed…
A: Current ratio = It measures the liquidity of the company. Current Ratio shows the company's ability…
Q: Christopher Company borrowed $6 million at 11% on January 1, 2020, to build a new building. The…
A: When a contract for construction of building is undertaken, it may be possible and rather likely…
Q: one. 1) Remaining VAT accounts of our company as of the end of January 2021 are as follows. 191…
A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…
Q: 11 NANGUTANG started constructing a building for its own use on January 1, 2020. NANGUTANG provided…
A: Borrowing cost means where the assets like building , take substantial time to build , then interest…
Q: Dexter Construction Corporation is building a student condominium complex; it started construction…
A: Capitalized interest is used to indicate the cost of funds that the company uses to finance the…
Q: Cornerstone Exercise 8-32 (Algorithmic) Warranties In 2019, Waldo Balloons sold 100 hot air balloons…
A:
Q: Problem 8-7 (with solution) On January 1, 2021, South Company acquired a building for 5,000,000.…
A: A journal entry is the first step—and an essential function—of the accounting process. Journal…
Q: Assume that Pearl completed the office and warehouse building on December 31, 2020, as planned at a…
A: a. Weighted Average Interest rate on general borrowings = 2240000/3840000* 10% +…
Q: Problem 16: The following disbursements were made in relation to the construction of CAN'T BE WITH…
A: Since you have asked for multiple subparts we will answer the first three subparts for you as per…
Q: ing. Expenditures for the completed structure totaled P8,000,000 during the year ended December 31,…
A: Given : Borrowed amount $10,000,000 Interest rate 12% Expenditures for the completed structure…
Q: On Dec 31, 2020 Laf borrowed $3,000,000 at 12% payable annually to finance construction of a new…
A: Capitalized Interest:- This is a method where a long term loan or asset's interest amount get added…
Q: Michek Company loans Sarasota Company $2,000,000 at 6% for 3 years on January 1, 2020. Michek…
A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…
Q: 37-On 1st July 2020 Bashir purchase a machine for RO 15,000. The terms of purchase was 20% cash and…
A: Current liabilities are those which are payable within 12 months So the amount payable in the next…
Q: On June 30, 2020, Zendaya purchased a special machinery to conduct its oil drilling operations in…
A: IAS 37 says that the provision for a future liability should be recognized ony if satisfies the…
Q: On Dec 31, 2020 Laf borrowed $3,000,000 at 12% payable annually to finance construction of a new…
A: Incremental Interest expense which is in addition to the interest recognised in loans related to…
Q: 35. On January 1, 2021, the national government agreed to provide Complex Company with a P10,000,000…
A: Grants means the amount received without any sale of product or providing any services. Here the…
Q: 1. Bank CO approved a loan application of Client ME on January 1, 20A for P3,500,000. Client ME is…
A: Operating income (EBIT) is another word for income from operations (IFO). The profit created by a…
Q: 20. On January 1, 2021, Kendall Inc. began construction of an automated cattle feeder system. The…
A: SOLUTION- CALCULATION OF AVERAGE EXPENDITURE OF 2021- PARTICULARS AMOUNT CALCULATION AMOUNT…
Q: FinanceCo lent $8 million to Corbin Construction on January 1, 2018, to construct a playground.…
A: 1.
Q: On January 1, 2021, Byner Company purchased a used tractor. Byner paid $6,000 down and signed a…
A: The discount of note payable is the difference in the value of the tractor and consideration paid.
Q: On Dec 31, 2020 Laf borrowed $3,000,000 at 12% payable annually to finance construction of a new…
A: Weighted average cost of capital is the cost incurred by the company to pay its debt, equity…
Q: FinanceCo lent $8 million to Corbin Construction on January 1, 2021, to construct a playground.…
A: Hey, since there are multiple requirements posted, we will answer the first three requirements. If…
Q: Dec 31 Purchased new equipment for P750,000, paying P150,000 cash and signing a 3-year, 7% note for…
A: Warranty expense refers to the expenses which is to be incurred by a business entity in case their…
Q: 15. LIME Co. decided to construct a building to expand its operations. The entity decided to obtain…
A: Borrowing cost in relation to construction of a qualified asset, shall be capitalized. Borrowing…
Q: Peterson, Inc. purchased a machine under a deferred payment contract on December 31, 2001. Under the…
A: Given a specified rate of return, Present Value (PV) is the current value of a future sum of money.…
Q: in exchange for a noninterest bearing note requiring eight Problem 23-15 (AICPA Adapted) On December…
A: Note: Since you have posted a question with multiple sub-parts, we will solve the first three…
Q: IAS 20 On January 2, 2017, Parasail Company received a consolidated grant of P12,000,000.…
A: The following calculations are disclosed in the books of Parasail Company for the conclusion of the…
Q: Determine the amount of borrowing costs to be capitalized and expensed.
A: Given in the question: Bank Loan for Power Plant 1000000 Interest on bank loan 15%…
Q: Q7:-On 1st January, 2012 A sells a truck to B, on the instalment payment system, on the following…
A:
Q: On Dec 31, 2020 Laf borrowed $3,000,000 at 12% payable annually to finance construction of a new…
A: Step 1 Weighted average rate of interests is the adjusted rate of contribution of each the loan by…
Q: On 31/12 / 20Χ0 the company V Corporation acquired a machine on credit. For the repayment, the…
A: Lets understand the basics. When entity purchase asset for credit and it is not in the usual term…
Q: 2,800,000 1,600,000 % bank loan 280,000 0% short-term note % long-term loan 160,000 2,000,000…
A: According to Accounting Standard 16 i.e. Borrowing cost . When an asset falls into the category of…
Q: How much is the cost of constructed building on December 31, 2020?
A: Loans are provided by various financial institutes such that any business can expand or perform…
Q: Zephyr Company is provided a grant by a foreign government for. the purpose of acquiring land for a…
A: As per the IFRS 9, financial instruments, the interest-free loan is initially recognized at the…
Q: 21. A promissory note which is dated January 1, 20A was received from a client for service rendered…
A: Promissory Note- It's a document that spells out the terms of the loan and indicates when it's due…
Q: A company has the following loans in place throughout the year ended 31 December 20X8. $m 10% bank…
A: We have the following information: On 1 July 20X8 $50 million was drawn down for construction of a…
Q: ABC Co. had these loans outstanding for the year 2020: Specific Loan: P1,000,000 at 10% General Loan…
A: The expenditures incurred by ABC Company are calculated as per the weighted average method and…
Q: Q6. ABC Corporation borrowed SAR 150,000 at 10% interest from NCB Bank on Jan. 1, 2020, for specific…
A: Calculation of the total interest for the year: Specific borrowing from NCB bank = SAR 150,000 x 10%…
Q: 8. AYALA LAND,INC. began work on a P70 million contract in 2019 to construct an office building.…
A:
Q: A company purchased land by signing a note with the seller, requiring down payment of P100,000,…
A: The value of land will be equal to present value of all payments to be made against purchase of…
Q: 000. Jingle Corp makes several payments to Reindeer Corp during 2018. Jingle Corp ced the…
A:
Q: grant is a zero-interest loan for 5 years evidenced by a for the purpose of acquiring land for a…
A: A government grant is assistance in the form of an interest-free loan provided by the government to…
The Problem 24-6 (IAA) Zephyr Company is provided a grant by a foreign governme for. the purpose of acquiring land for a building site grant is a zero-interest loan for 5 years evidenced hu promissory note. The loan was granted on January 1, 2020 for P8,000;000, The market rate of interest is 6%. The present value of 1 for fiv periods at 6% is .7473. Required: Prepare
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
- solve both a and b Acruni Co. had the following loans in place at the beginning of 2019. 1 January 2019 GHC m10% Bank loan repayable 2020 1209.5% Bank loan repayable 2021 808.9% debenture repayable 2024 100On 1 January 2019, Acruni Co began construction of a qualifying asset, a piece of machinery for a hydroelectric plant, using existing borrowings. Expenditure drawndown for the construction was GHc30 million on 1 January 2019, and GHc20million on 1 October 2019. Surplus funds were invested temporarily at a rate of 2%. Requireda) Calculate the borrowing costs that can be capitalized for the piece ofmachinery. b) Compute the cost of the machinery that will be reported in the statementof financial position as at December ,2019Acruni Co. had the following loans in place at the beginning of 2019. 1 January 2019 GHC m 10% Bank loan repayable 2020 9.5% Bank loan repayable 2021 8.9% debenture repayable 2024 120 80 100 On 1 January 2019, Acruni Co began construction of a qualifying asset, a piece of machinery for a hydroelectric plant, using existing borrowings. Expenditure drawn down for the construction was GHC30 million on 1 January 2019, and GHC20 million on 1 October 2019. Surplus funds were invested temporarily at a rate of 2%. Required a) Calculate the borrowing costs that can be capitalized for the piece of machinery. b) Compute the cost of the machinery that will be reported in the statement of financial position as at December, 2019 ATES)Q...1 Benson Limited is constructing a Power Plant which was completed on 31st December 2019. The company obtained a bank loan of R1,000,000 at a rate of 15% per annum to construct the Power Plant on 1st January 2019. As of 31st December 2019, Benson Limited also had the following loans outstanding: I. 18% 5-year loan Note of R1,500,000 II. 14% Debentures of R1,000,000 Expenditures on the project were made as follows: I. On the 31st March 2019, R600,000 was incurred; II. R800,000 was incurred on 30th June 2019; III. The final expenditure incurred was R300,000 on 31st December 2019. During the year Benson Limited invested R400,000 of the bank loan for 2 months at an interest of 9% per annum. Required: Determine the amount of borrowing costs to be capitalized and expensed.
- Course: UNIV University of the People Borrowing Your business requests a 3-month loan for $500,000. What will be the interest paid at the end of the term if the business risk percentage is assessed at 2.2% and LIBOR is at 2.8%? interest paid = $ [ ? ] Round to the nearest hundredth. Enter right 2003-2021 Acellus Corporation. All Rights Reserved. MacBook 80 888 DL 74 F8 &Pickles R Us is a pickle farm located in the Northeast. The following transactions take place: A. On November 6, Pickles borrows $820,000 from a bank to cover the initial cost of expansion. Terms of the loan are payment due in six months from November 6, and annual interest rate of 3%. B. On December 12, Pickles borrows an additional $200,000 with payment due in three months from December 12, and an annual interest rate of 10%. C. Pickles pays its accounts in full on March 12, for the December 12 loan, and on May 6 for the November 6 loan. Record the journal entries to recognize the initial borrowings, and the two payments for Pickles.Dexter Construction Corporation is building a student condominium complex; it started construction on January 1, Year 1. Dexter borrowed 2.5 million on January 1 specifically for the project by issuing a 10%, 5-vear, 2.5 million note, which is payable on December 31 of Year 3. Dexter also had a 12%, 5-year, 3 million note payable and a 10%, 10-year, 1.8 million note payable outstanding all year. Calculate the weighted average interest rate on the non-construction-specific debt for Year 1. RE10-9 Refer to RE10-8. In Year 1, Dexter incurred costs as follows: Calculate Dexters weighted average accumulated expenditures.
- A company has the following loans in place throughout the year ended 31 December 20X8. $m 10% bank loan 140 8% bank loan 200 On 1 July 20X8 $50 million was drawn down for construction of a qualifying asset which was completed during 20X9. What amount should be capitalised as borrowing costs at 31 December 20X8 in respect of this asset? A $5.6 million B $2.8 million C $4.4 million D $2.2 millionThe company purchased the equipment 600,000. The interest rate of bank is 12,400. The loan is denominated in OMR, matures on March 31 2019. The spot rate of OMR 2.50. What is the value of interest expenses? Select one: a. None of the other points b. OMR 12,400 c. OMR 1,500,000 d. OMR 31,000Loan Receivable and Receivable Financing Activity 1: Problems Problem 1: PDR Bank granted a loan to a borrower on January1, 2020. The interest on the loan is 10% payable annually starting December 31, 2020. The loan matures in three years on December 31, 2022. Principal amount Origination fee charged againstthe borrower Direct origination cost incurred Indirect origination costs 2,000,000 171,050 75,000 15,000 After considering the origination fee charged againstthe borrower and the direct origination costincurred, the effective rate on theloan is 12.5%. Q1. The carrying amount oftheloan on January 1, 2020: is Q2: The journal entries on January 1,2020: Problem 2: LSB granted a loan to the borrower on January1, 2020. The interest on the loan is 8% payable annually starting December 31, 2020. Theloan matures in three years on December 31, 2022. Principal amount Origination fee charged against the borrower Direct origination cost incurred 1,500,000 50,000 130,150 After considering the…
- Current Attempt in Progress Wildhorse Co., receives $372,000 when it issues a $372.000, 10%, mortgage note payable to finance the construction of a building at December 31, 2025. The terms provide for annual installment payments of $62,000 on December 31. Prepare the journal entries to record the mortgage loan and the first two installment payments. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts) Date Account Titles and Explanation Debit CreditWord Problem Question 3: (You have to submit an image of your FULL solution to the question in eConestoga -> Course Tools -> Assignments [Midterm Submission]) A loan (promissory note) of $8,200 was made. It is to be paid back in 4 years with interest of 3.65% compounded quarterly. What would be the appropriate price to pay for the contract 6 months after the original contract date to yield the buyer 7.85% compounded semi-annually? Round you final answer to two decimals. Do not round intermediate steps. Do not include the dollar sign ($) in your answer. For example, $89.36 input as 89.36. Your Answer: AnswerExcel Online Structured Activity: Amortization schedule The data on a loan has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. X Open spreadsheet a. Complete an amortization schedule for a $42,000 loan to be repaid in equal installments at the end of each of the next three years. The interest rate is 9% compounded annually. Round all answers to the nearest cent. Year 1 2 3 Year 1: Year 2: Year 3: I $ $ $ Beginning Balance ||| IV V % Interest % heck My Work $ $ % Payment b. What percentage of the payment represents interest and what percentage represents principal for each of the three years? Round all answers to two decimal places. % Principal % Reset Problem % $ $ $ % Interest $ $ $ Repayment of Principal $ c. Why do these percentages change over time? I. These percentages change over time because even though the total payment is constant the amount of interest paid each year is declining as…