2. On January 1, 20x1, J&J Co. issues a noninterest-bearing noteof P3,000,000 in exchange for equipment. The note is due inthree equal annual installments every December 31. Theeffective interest rate is 18%.Saibp anRequirements:a. Compute for current and noncurrent portions of the notepayable on December 31, 20x1.b. Compute for the balance of discount on note payable onDecember 31, 20x1 and determine how this amount isallocated to the current and noncurrent portions of the note.c. Provide all the entries during the term of the note payable.

Non-interest bearing note: P300,000 Effective interest rate: 18% Present value of annuity factor:…

Answered: 2. On January 1, 20x1, J&J Co. issues a…

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 27E

See similar textbooks

Similar questions

3. On January 1, 20x1, Drive Co. paid cash of P200,000 and issued a noninterest-bearing note P2,000,000 in exchange for vehicle. The note is due in four equal annual installments. The first installment is due on January 1, 20x1 and the succeeding installments are due every 1st of January. The prevailing rate of interest for this type of not is 12%. Requirements: a. Prepare the journal entries. b. How much is the interest expense in 20x2? c. How much is the carrying amount of the note on December 31, 20x1? Please answer optionAand B and c
On January 1, Year 1, Zero Company obtained a $52,000, four-year, 6.5% installment note from Regional Bank. The note requires annual payments of $15,179, beginning on December 31, Year 1. The December 31, Year 2 carrying amount in the amortization table for this installment note will be equal to )a. $26,000 b. $21,642 Oc. $28,402 Od. $27,635
On June 8, Williams Company issued an $75,972, 6%, 120-day note payable to Brown Industries. Assuming a 360-day year, what is the maturity value of the note? When required, round your answer to the nearest dollar. Oa. $75,972 Ob. $77,491 Oc. $80,530 Od. $4,558 > Other fav t
10. On Jan. 1, 20x1, Parya Co. received a 3-year, P900,000 receivable due as follow note noninterest-bearing P400,000 on Dec. 31, 20x1, P300,000 on Dec. 31, 20x2, and P200,000 on Dec. 31, 20x3. The prevailing rate of interest for this type of note is 10%. How much is the carrying amount of the receivable on Dec. 31, 20x1? c. 376,345 d. 428,346 b. 438,016 a. 467,354
On January 1, 20x1, an entity issued a noninterest-bearing note of P1,200,000 in exchange for land. The note is due in three equal annual installments every December 31. The effective interest rate is 17%. Requirements Provide all the entries during the term of the note. Compute for the current and non current portions of the note on December 31, 20x1 and the amount of “Discount on notes payable” allocated to each portion.
On January 1, Year 1, Zero Company obtained a $52,000, 4-year, 6.5% installment note from Regional Bank. The note requires annual payments of $15,179, beginning on December 31, Year 1. The December 31, Year 3 carrying amount in the allocation of periodic payments table for this installment note will be equal to:- $6,463 $13,000 $14,252 $0
For an interest-bearing promissory notes, compute the sale proceeds, when the issue amount is $18,200, term of the note is 4 1/2 years with interest rate 9.45% compounded monthly, the date of sale before maturity is 1.7 years with a discount rate 15% compounded quarterly. Select one: O a. 21634.97 Ob. 21642.76 O c. 21580.47 d. none
On June 8, Williams Company issued an $91,200, 11%, 120-day note payable to Brown Industries. Assuming a 360-day year, what is the maturity value of the note? Round your answer to the nearest whole dollar. Oa. $10,032 Ob. $94,544 Oc. $101,232 Od. $91,200
On January 1, Year 1, Zero Company obtained a $52,000, 4-year, 6.5% installment note from Regional Bank. The note requires annual payments of $15,179, beginning on December 31, Year 1. The December 31, Year 2 carrying amount in the allocation of periodic payments table for this installment note will be equal to Question 3 options: $26,000 $27,635 $21,642 $28,402
If ABC Co. issued a 3-year non-interest bearing note in exchange of an equipment for P 1,000,000, which of the following is correct related to the recognition of the note? (market rate of interest for similar type of notes is 10%) a.P 100,000 will be credited to discount on notes payable at initial recognition. b.P 248,685.20 will be credited to discount on notes payable at initial recognition. c.The carrying value of the notes payable at the date of issuance is P 751,314.80. d. The equipment account would be debited at the amount of P 1,000,000.
3. On January 1, Esly Company obtained a $125,000, 7-year 5% installment note from Farmers Bank. The note requires annual payments of $21,602, with the first payment occurring on the last day of the fiscal year. (a) Prepare an amortization schedule for Year 1 and Year 2 Date January 1 carrying amount Note payment Interest expense Decrease in Notes payable (b) Journalize the following entries: a. Issued the installment notes for cash on January 1. Dec 31 carrying amount
3. On January 1, 20x1, Otters Co. issued a 3-year, noninterest bearing note of P1,200,000 in exchange for equipment. The note is due in three equal annual installments beginning on January 1, 20x1 and every January 1 thereafter. The effective interest rate is 10%. Requirements: a) Prepare amortization table; b) How much is the interest expense in 20x1?; c) How much is the carrying amount of the note on Dec 31, 20x1?

SEE MORE QUESTIONS

Recommended textbooks for you

Financial Accounting Intro Concepts Meth/Uses

Finance

ISBN:

9781285595047

Author:

Weil

Publisher:

Cengage

Financial Accounting Intro Concepts Meth/Uses

Finance

ISBN:

9781285595047

Author:

Weil

Publisher:

Cengage

SEE MORE TEXTBOOKS