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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INMACULATA TRUCKING., INC.
On April 1, 2020, Marie France organized a business called Inmaculata Trucking. Inc. During
April, the company entered into the following transactions:
Apr 1
Marie France deposited Php 500,000 cash in a bank account in the name of the business.
Purchased for Phr 250,000 a transportation equipmentto be used in the business.
Marie France paid 50% as down payment while the balance will be paid on May 15, 2020
Apr 1
Apr 1
Paid rental forthe month of April, Php 5,000
Apr 5
Earned and collected trucking income from Eva, Php 8,000
Apr 8
Earned trucking income from Julia, Php 30,000 on account and Julia will pay on May 8, 2020
Apr 10
Paid salaries of drivers, Php 10,000
Rented the vehicle to Joshua for Php 35,000, Joshua paid Php 20,000 on that date and
the balance on April 20
Apr 15
Apr 18
Paid electric bills for the month, Php 2,000
Apr 20
Collected from Joshua the balance of his April 15 account
Apr 25
Purchased office supplies, Php 2,300
Apr 29
Earned and…
Required :1. Record Journal Entries2. Post them into the ledger accounts3. Prepare the Trial Balance as on 31.12.2020
On January 1, 2021, LLB Industries borrowed $400,000 from Trust Bank by issuing a two-year, 8% note, with interest payable quarterly.
LLB entered into a two-year interest rate swap agreement on January 1, 2021, and designated the swap as a fair value hedge. Its intent
was to hedge the risk that general interest rates will decline, causing iPhone USB ue of its debt to increase. The agreement called for the
company to receive payment based on a 8% fixed interest rate on a notional amount of $400,000 and to pay interest based on a
floating interest rate. The contract called for cash settlement of the net interest amount quarterly.
Floating (LIBOR) settlement rates were 8% at January 1, 6% at March 31, and 4% June 30, 2021. The fair values of the swap are quotes
obtained from a derivatives dealer. Those quotes and the fair values of the note are as indicated below.
Fair value of interest rate swap
Fair value of note payable
January 1
0
$400,000
Required:
1. Calculate the net cash…
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