Intermediate Accounting, 10 Ed
10th Edition
ISBN: 9781260310177
Author: Mark W. Nelson, Wayne B. Thomas J. David Spiceland
Publisher: McGraw-Hill Education
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Chapter 14, Problem 14.3DMP
To determine
Non-Interest Bearing Debt
The amount of money that a company’s be in debt without any interest payment or penalties increasing whereas, the company holds the debt.
To Advise: Mr. W for purchase of considering.
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On January 1, 2024, Nath-Langstrom Services, Incorporated, a computer software training firm, leased several computers under a two-
year operating lease agreement from ComputerWorld Leasing, which routinely finances equipment for other firms at an annual Interest
rate of 4%.
• The contract calls for four rent payments of $12,500 each, payable semiannually on June 30 and December 31 each year.
• The computers were acquired by ComputerWorld at a cost of $95,000 and were expected to have a useful life of five years with
no residual value.
. Both firms record amortization and depreciation semiannually.
Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
Required:
1. Prepare appropriate Journal entries recorded by Nath-Langstrom Services for the first year of the lease.
2. Prepare appropriate Journal entries recorded by ComputerWorld Leasing for the first year of the lease.
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Problem 6-4 Calculating Instalment Loan Payments, Interest, and Principal [LO2]
a. f Dave had borrowed $280 for one year at an APR of 6 percent, compounded monthly, what would have been las monthly loan
payment? Use Exhibit 18-4. (Do not round your intermediate calculations. Round your final answer to 2 decimal places. Omit the
"S" sign in your response.)
PMT
b What would have been the breakdown between interest and principal of the fifth payment? Use Exhibit 194. (Do not round your
Intermediate calculations. Round your final answers to 2 decimel places. Omit the "S" sign in your response.)
Interest
Principal
CH9 HW
5
points
2
On January 1 of this year, Skamania Company completed the following transactions (assume a 9% annual interest rate): (FV of $1, PV of
$1, FVA of $1, and PVA of $1)
Note: Use the appropriate factor(s) from the tables provided.
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a. Bought a delivery truck and agreed to pay $60,100 at the end of three years.
b. Rented an office building and was given the option of paying $10,100 at the end of each of the next three years or paying
$28,100 immediately.
c. Established a savings account by depositing a single amount that will increase to $90,200 at the end of seven years.
d. Decided to deposit a single sum in the bank that will provide 9 equal annual year-end payments of $40,100 to a retired employee
(payments starting December 31 of this year).
Required:
a. What is the cost of the truck that should be recorded at the time of purchase?
b. Which option for the office building results in the lowest present value?
c. What single amount must be…
Chapter 14 Solutions
Intermediate Accounting, 10 Ed
Ch. 14 - How is periodic interest determined for...Ch. 14 - As a general rule, how should long-term...Ch. 14 - How are bonds and notes the same? How do they...Ch. 14 - What information is contained in a bond indenture?...Ch. 14 - How is the price determined for a bond (or bond...Ch. 14 - A zero-coupon bond pays no interest. Explain.Ch. 14 - Prob. 14.8QCh. 14 - Compare the two commonly used methods of...Ch. 14 - Prob. 14.10QCh. 14 - When a notes stated rate of interest is...
Ch. 14 - How does an installment note differ from a note...Ch. 14 - Prob. 14.13QCh. 14 - Prob. 14.14QCh. 14 - Air Supply issued 6 million of 9%, 10-year...Ch. 14 - Both convertible bonds and bonds issued with...Ch. 14 - Prob. 14.17QCh. 14 - Cordova Tools has bonds outstanding during a year...Ch. 14 - If a company prepares its financial statements...Ch. 14 - (Based on Appendix 14A) Why will bonds always sell...Ch. 14 - Prob. 14.21QCh. 14 - Prob. 14.22QCh. 14 - Prob. 14.23QCh. 14 - Bank loan; accrued interest LO132 On October 1,...Ch. 14 - Non-interest-bearing note; accrued interest LO132...Ch. 14 - Determining the price of bonds LO142 A company...Ch. 14 - Determining the price of bonds LO142 A company...Ch. 14 - Effective interest on bonds LO142 On January 1, a...Ch. 14 - Effective interest on bonds LO142 On January 1, a...Ch. 14 - Straight-line interest on bonds LO142 On January...Ch. 14 - Investment in bonds LO142 On January 1, a company...Ch. 14 - Note with unrealistic interest rate LO143 On...Ch. 14 - Installment note LO143 On January 1, a company...Ch. 14 - Prob. 14.12BECh. 14 - Bonds with detachable warrants LO145 Hoffman...Ch. 14 - Convertible bonds LO145 Hoffman Corporation...Ch. 14 - Prob. 14.22ECh. 14 - Prob. 14.36ECh. 14 - Prob. 14.14PCh. 14 - Prob. 14.17PCh. 14 - Prob. 14.21PCh. 14 - Prob. 14.3DMP
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