Please Solve In 15mins I will Thumbs-up On January 1, 2019, Aitocs Inc. sold used equipment with a cost of $15,000 and a carryingamount of $2,500 to Disc Corp. in exchange for a $5,000, three-year non-interest-bearing notereceivable. Aitoes Inc. typically borrows funds at a rate of 10%, while Dise Corp. has variouslines of credit at 9%. Assume that Aitoes follows IFRS.Required:Prepare all journal entries related to the transaction in 2019, 2020, and 2021 for Aitoes Inc.(Show your calcuations)Please type your answers in the box below.

Notes receivable is used to track the money to be received from the borrower

On January 1, 2019, Aitoes Inc. sold used equipment with a cost of S15,000 and a carrying amount of $2,500 to Disc Corp. in exchange for a $5,000, three-year non interest-bearing note receivable. Aitoes Inc. typically borrows funds at a rate of 10%, while Disc Corp. has various lines of credit at 9%. Assume that Aitoes follows IFRS. Required: Prepare all journal entries related to the transaction in 2019, 2020, and 2021 for Aitoes Inc. (Show your calcuations) Please type your answers in the box below.

On January 1, 2019, Aitoes Inc. sold used equipment with a cost of S15,000 and a carrying amount of $2,500 to Disc Corp. in exchange for a $5,000, three-year non interest-bearing note receivable. Aitoes Inc. typically borrows funds at a rate of 10%, while Disc Corp. has various lines of credit at 9%. Assume that Aitoes follows IFRS. Required: Prepare all journal entries related to the transaction in 2019, 2020, and 2021 for Aitoes Inc. (Show your calcuations) Please type your answers in the box below.

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

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 10MC: On January 1, 2019, Park Company accepted a 36,000, non-interest-bearing, 3-year note from a major...

See similar textbooks

Similar questions

On January 1, 2019, Carson Inc sold used equipment with a cost of S15,000 and a carryingamount of $2,500 to Disc Corp. in exchange for a $5,000, three-year non-interest-bearing notereceivable. Aitocs Inc. typically borrows funds at a rate of 10%, while Bathgate Corp. has variouslines of credit at 9%. Assume that Carson follows IFRS.Required:Prepare all journal entries related to the transaction in 2019, 2020, and 2021 for Aitocs Inc.(Show your calcuations)
Anama Company is a dealer of equipment. On January 1, 2021, the entity sold equipment in exchange for a noninterest-bearing note requiring 5 annual payments of P850,000. The first payment was made on December 31, 2021. The market rate for a similar note was 9%. The entity used 2 decimal places for the PV factor. How much is the carrying amount of the note receivable on December 31, 2021?
On June , 2019 , XYZ Company factored receivables of \$700,000 to ABC Company . ABC Company assesses a finance charge of 1% of the receivables and retains 4% of the receivables . Assume that XYZ Company factors the receivables on a without guarantee (without recourse ) basis . The journal entry to be recorded by XYZ company is:
On January 1, 2020, CPA Co. sold land with carrying amount of P1,8o00,000 in exchange for a 1o-month, 10% note with face value of P2,000,000. On May 1, 2020, the entity discounted the note with recourse. The bank discount rate is 12%. The discounting transaction is accounted for as a secured borrowing. On November 1, 2020, the maker dishonored the note receivable. The entity paid the bank the maturity value of the note plus protest fee of P10,000. On December 1, 2020, the entity collected the dishonored note receivable in full plus 12% annual interest on the total amount due. How much cash was collected on December 1? (Round off to two decimal places.)
Sheffield Corp. factors $710,000 of accounts receivable with Sage Hill Inc., Inc. on a with recourse basis. Sage Hill Inc. will collect the receivables. The receivable records are transferred to Sage Hill Inc. on August 15, 2020. Sage Hill Inc. assesses a finance charge of 2.0% of the amount of accounts receivable and also reserves an amount equal to 5.05% of accounts receivable to cover probable adjustments. Sheffield prepares financial statements under ASPE Assume the conditions for to be recorded as a sale are met. Prepare the journal entry on August 15, 2020, for Sheffield to record the sale of receivables, assuming the recourse obligation has a fair value of $5,200. (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) Account Titles and Explanation Credit Debit
On April 1, 2020, Bonita Company assigns $533,000 of its accounts receivable to the Third National Bank as collateral for a $332,400 loan due July 1, 2020. The assignment agreement calls for Bonita to continue to collect the receivables. Third National Bank assesses a finance charge of 3% of the accounts receivable, and interest on the loan is 10% (a realistic rate of interest for a note of this type). Prepare the journal entry for Bonita’s collection of $374,800 of the accounts receivable during the period from April 1, 2020, through June 30, 2020. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
On April 1, 2020, Bonita Company assigns $533,000 of its accounts receivable to the Third National Bank as collateral for a $332,400 loan due July 1, 2020. The assignment agreement calls for Bonita to continue to collect the receivables. Third National Bank assesses a finance charge of 3% of the accounts receivable, and interest on the loan is 10% (a realistic rate of interest for a note of this type). Prepare the April 1, 2020, journal entry for Bonita Company. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
On April 1, 2020, Bonita Company assigns $533,000 of its accounts receivable to the Third National Bank as collateral for a $332,400 loan due July 1, 2020. The assignment agreement calls for Bonita to continue to collect the receivables. Third National Bank assesses a finance charge of 3% of the accounts receivable, and interest on the loan is 10% (a realistic rate of interest for a note of this type). On July 1, 2020, Bonita paid Third National all that was due from the loan it secured on April 1, 2020. Prepare the journal entry to record this payment. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Kingbird Corporation factors $ 276,900 of accounts receivable with Kathleen Battle Financing, Inc. on a with recourse basis. Kathleen Battle Financing will collect the receivables. The receivables records are transferred to Kathleen Battle Financing on August 15, 2020. Kathleen Battle Financing assesses a finance charge of 2% of the amount of accounts receivable and also reserves an amount equal to 4% of accounts receivable to cover probable adjustments.(b) Assume that the conditions are met for a transfer of receivables with recourse to be accounted for as a sale. Prepare the journal entry on August 15, 2020, for Kingbird to record the sale of receivables, assuming the recourse obligation has a fair value of $ 3,520. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) The journal entry has the date of Aug 15th & a space for 5 possible…
On February 1, 2019, Henson Company factored receivables with a carrying amount of $300,000 to Agee Company. Agee Company assesses a finance charge of 3% of the receivables and retains 5% of the receivables. Relative to this transaction, you are to determine the amount of loss on sale to be reported in the income statement of Henson Company for February. Assume that Henson factors the receivables on a with guarantee (recourse) basis. What is the amount of recourse liability to be recorded on February? Select one: O a. $291,000. O b. None of the answers is correct. O c. $300,000. O d. $9,000. e. $276,000. O f. $285,000.
On January 1 2020, Machete Company sold land with a carrying amount of P1 500 000 in exchange for a 9 month 10% note with face value of P2 000 000. The 10% rate properly reflects the time value of money for this type of note. On April 1 2020 the entity discounted the note with recourse. The bank discount rate is 12%. The discounting transaction is accounted for as a secured borrowing. On October 1 2020, the make dishonored the note receivable. The entity paid the bank the maturity value of the note plus the protest fee of P10 000. On December 31 2020, the entity collected the dishonored note receivable in full plus 12% annual interest on the total amount due. Required: Prepare journal entries to record the transaction.
Kaku Company is a dealer in equipment. On December 31, 2019, the entity sold an equipment in exchange for a noninterest bearing note requiring five annual payments of P500,000. The first payment was made on December 31, 2020. The market interest for similar notes was 8%. The relevant present value factors were: PV of 1 at 8% for 5 periods0.68 PV of an ordinary annuity of 1 at 8% for 5 periods3.99 REQUIRED: Prepare journal entries for 2019 and 2020. Determine the carrying amount of the note receivable on December 31, 2020. Determine the interest income for 2021.