On December 31,2020, Sheridan Company signed a $1,228,500 note to Skysong Bank. The market interest rate at that time was 10%. The stated interest rate on the note was 8%, payable annually. The note matures in 5 years. Unfortunately, because of lower sales, Sheridan's financial situation worsened. On December 31, 2022, Skysong Bank determined that it was probable that the company would pay back only $737,100 of the principal at maturity. However, it was considered likely that interest would continue to be paid, based on the $1,228,500 loan. (a) Determine the amount of cash Sheridan received from the loan on December 31, 2020. (Round present value factors to 5 decimal places, eg. 0.52513 and final answer to O decimal places, eg. 5,275.)

On December 31,2020, Sheridan Company signed a $1,228,500 note to Skysong Bank. The market interest rate at that time was 10%. The stated interest rate on the note was 8%, payable annually. The note matures in 5 years. Unfortunately, because of lower sales, Sheridan's financial situation worsened. On December 31, 2022, Skysong Bank determined that it was probable that the company would pay back only $737,100 of the principal at maturity. However, it was considered likely that interest would continue to be paid, based on the $1,228,500 loan. (a) Determine the amount of cash Sheridan received from the loan on December 31, 2020. (Round present value factors to 5 decimal places, eg. 0.52513 and final answer to O decimal places, eg. 5,275.)

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 28E: On January 1, 2019, Northfield Corporation becomes delinquent on a 100,000, 14% note to First...

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On January 1, 2019, Northfield Corporation becomes delinquent on a 100,000, 14% note to First National Bank, on which 16,651 of interest has accrued. On January 2, 2019, the bank agrees to restructure the note. It forgives the accrued interest, extends the repayment date to December 31, 2021, and reduces the interest rate to 10%. Required: Prepare a schedule for Northfield to compute the annual interest expense in regard to the preceding note for each year of the restructuring agreement.
On December 31, 2020, Pronghorn Company signed a $1,284,300 note to Stellar Bank. The market interest rate at that time was 12%. The stated interest rate on the note was 10%, payable annually. The note matures in 5 years. Unfortunately, because of lower sales, Pronghorn’s financial situation worsened. On December 31, 2022, Stellar Bank determined that it was probable that the company would pay back only $770,580 of the principal at maturity. However, it was considered likely that interest would continue to be paid, based on the $1,284,300 loan. Determine the amount of cash Pronghorn received from the loan on December 31, 2020. (Round present value factors to 5 decimal places, e.g. 0.52513 and final answer to 0 decimal places, e.g. 5,275.)
On December 31, 2020, Concord Company signed a $1,290,500 note to Marigold Bank. The market interest rate at that time was 11%. The stated interest rate on the note was 9%, payable annually. The note matures in 5 years. Unfortunately, because of lower sales, Concord's financial situation worsened. On December 31, 2022, Marigold Bank determined that it was probable that the company would pay back only $774,300 of the principal at maturity. However, it was considered likely that interest would continue to be paid, based on the $1,290,500 loan. (a) Determine the amount of cash Concord received from the loan on December 31, 2020. (Round present value factors to 5 decimal places, e.g. 0.52513 and final answer to 0 decimal places, e.g. 5,275.) Amount of cash Concord received from the loan $
On December 31, 2020, Sweet Company signed a $1,278,400 note to Pharoah Bank. The market interest rate at that time was 10%. The stated interest rate on the note was 8%, payable annually. The note matures in 5 years. Unfortunately, because of lower sales, Sweet’s financial situation worsened. On December 31, 2022, Pharoah Bank determined that it was probable that the company would pay back only $767,040 of the principal at maturity. However, it was considered likely that interest would continue to be paid, based on the $1,278,400 loan.
On December 31, 2020, Grouper Company signed a $1,049,400 note to Monty Bank. The market interest rate at that time was 10%. The stated interest rate on the note was 8%, payable annually. The note matures in 5 years. Unfortunately, because of lower sales, Grouper's financial situation worsened. On December 31, 2022, Monty Bank determined that it was probable that the company would pay back only $629,640 of the principal at maturity. However, it was considered likely that interest would continue to be paid, based on the $1,049,400 loan. (a) Your answer is incorrect. Determine the amount of cash Grouper received from the loan on December 31, 2020. (Round present value factors to 5 decimal places, e.g. 0.52513 and final answer to O decimal places, e.g. 5,275.) Amount of cash Grouper received from the loan $
On December 31, 2025, Waterway Company signed a $1,228,500 note to Wildhorse Bank. The market interest rate at that time was 10%. The stated interest rate on the note was 8%, payable annually. The note matures in 5 years. Unfortunately, because of lower sales, Waterway's financial situation worsened. On December 31, 2027, Wildhorse Bank determined that it was probable that the company would pay back only $737,100 of the principal at maturity. However, it was considered likely that interest would continue to be paid, based on the $1,228,500 loan. (a) Your answer is incorrect. Determine the amount of cash Waterway received from the loan on December 31, 2025. (Round present value factors to 5 decimal places, e.g. 0.52513 and final answer to O decimal places, e.g. 5,275.) Amount of cash Waterway received from the loan $
On December 31, 2020, Stellar Company signed a $ 1,022,000 note to Pearl Bank. The market interest rate at that time was 11%. The stated interest rate on the note was 9%, payable annually. The note matures in 5 years. Unfortunately, because of lower sales, Stellar's financial situation worsened. On December 31, 2022, Pearl Bank determined that it was probable that the company would pay back only $ 613,200 of the principal at maturity. However, it was considered likely that interest would continue to be paid, based on the $ 1,022,000 loan. (a) Determine the amount of cash Stellar received from the loan on December 31, 2020. (Round present value factors to 5 decimal places, e.g. 0.52513 and final answer to 0 decimal places, e.g. 5,275.) Amount of cash Stellar received from the loan %24
On December 31, 2025, Crane Company signed a $1,067,100 note to Cheyenne Bank. The market interest rate at that time was 11%. The stated interest rate on the note was 9%, payable annually. The note matures in 5 years. Unfortunately, because of lower sales, Crane's financial situation worsened. On December 31, 2027, Cheyenne Bank determined that it was probable that the company would pay back only $640,260 of the principal at maturity. However, it was considered likely that interest would continue to be paid, based on the $1,067,100 loan. (a) Determine the amount of cash Crane received from the loan on December 31, 2025. (Round present value factors to 5 decimal places, e.g. 0.52513 and final answer to O decimal places, e.g. 5,275.) Amount of cash Crane received from the loan $ eTextbook and Media eTextbook Save for Later Assistance Used Attempts: 0 of 3 used Submit Answer
On December 31, 2020, Conchita Martinez Company signed a $1,000,000 note to Sauk City Bank. The market interest rate at that time was 12%. The stated interest rate on the note was 10%, payable annually. The note matures in 5 years. Unfortunately, because of lower sales, Conchita Martinez’s financial situation worsened. On December 31, 2022, Sauk City Bank determined that it was probable that the company would pay back only $600,000 of the principal at maturity. However, it was considered likely that interest would continue to be paid, based on the $1,000,000 loan. Instructions a. Determine the amount of cash Conchita Martinez received from the loan on December 31, 2020. b. Prepare a note amortization schedule for Sauk City Bank up to December 31, 2022. c. Determine the loss on impairment that Sauk City Bank should recognize on December 31, 2022.
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On December 31, 2020, Firth Company borrowed $62,092 from Paris Bank, signing a 5-year, $100,000 zero-interest-rate note. The note was issued to yield 10% interest. Unfortunately, during 2022, Firth began to experience financial difficulty. As a result, at December 31, 2022, Paris Bank determined that it was probable that it would collect only $75,000 at maturity. The market rate of interest on loans of this nature is now 11%. Instructions a. Prepare the entry (if any) to record the impairment of the loan on December 31, 2022, by Paris Bank. b. Prepare the entry on March 31, 2023, if Paris learns that Firth will be able to repay the loan under the original terms.
On December 31, 2020, Iva Majoli Company borrowed $62,092 from Paris Bank, signing a 5-year, $100,000 zero-interest-bearing note. The note was issued to yield 10% interest. Unfortunately, during 2022, Majoli began to experience financial difficulty. As a result, at December 31, 2022, Paris Bank determined that it was probable that it would receive back only $75,000 at maturity. The market rate of interest on loans of this nature is now 11%. Instructions a. Prepare the entry to record the issuance of the loan by Paris Bank on December 31, 2020. b. Prepare the entry, if any, to record the impairment of the loan on December 31, 2022, by Paris Bank.