On January 1, 2020, Billy Company sold equipment that originally cost $5,000,000 to Selecta Company. As payment, Selecta gave Crawford a $7,000,000 note.
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On January 1, 2020, Billy Company sold equipment that originally cost $5,000,000 to Selecta Company. As payment, Selecta gave Crawford a $7,000,000 note. The note bears an interest rate of 4% and is to be repaid in three annual installments plus interest on the outstanding balance. The first payment is due on December 31, 2020. The market price of the land is not readily determinable. The prevailing rate of interest for notes of this type is 8%.
Determine the unamortized premium/discount balance on December 31, 2021
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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 January 1, 2020, Billy Company sold equipment that originally cost $5,000,000 to Selecta Company. As payment, Selecta gave Crawford a $7,000,000 note. The note bears an interest rate of 4% and is to be repaid in three annual installments plus interest on the outstanding balance. The first payment is due on December 31, 2020. The market price of the land is not readily determinable. The prevailing rate of interest for notes of this type is 8%. What Amount of Interest income, if any, should be included in Billy's 2020 income statement?On January 1, 2019, Erwan Company sold land to Heaven Company. There was no established market price for the land. heaven gave Erwan a P2,400,000 noninterest bearing note payable in three equal annual installments of P800,000 with the first payment due December 31, 2019. The note has no ready market. The prevailing rate of interest for a note of this type is 10%. The present value of a P2,400,000 note payable in three equal annual installments of P800,000 at a 10% rate of interest is P1,989,600. On January 1, 2019, how much should note payable be credited? A. 2,400,000B. 800,000C. 3,200,000D. P1,989,600
- On January 1, 2022, Jantzen Company sold land to Dansko Company. There was no established market price for the land. Dansko gave Jantzen a P2,400,000 Zero-interest-bearing note payable in three equal annual installments of P800,000 with the first payment due December 31, 2022. The note has no ready market. The prevailing rate of interest for a note of this type is 10%. The present value of a P2,400,000 note payable in three equal annual installments of P800,000 at a 10% rate of interest is P1,989,600. The note will be reported on Dansko’s 2022 statement of financial position at a carrying value of P2,400,000 P2,188,560 P2,126,400 P1,388,560On January 1, 2019, Sobiono company sold land to Gliezel company. There were no established market price for the land. Glieezel gave Sobiono a P4,800,000 noninterest bearing note payable in three equal annual installments of P1,600,000 with the first payment due December 31, 2019. The note has no ready market. The prevailing rate of interest for a note of this type is 10%. The present value of a P4,800,000 note payable in three equal annual installments of P1,600,000 at a 10% rate of interest is P3,979,200. What is the carrying amount of the note payable on December 31, 2019?On January 1,2021, ABC Corporation purchased a land for P 15,000,000. In exchange of the land, ABC issued a non-interest bearing note which is due on December 31,2025. There is no readily available market value for the building, but the current market rate of interest for comparable notes is 15%How much is the balance of Discount on notes payable as of December 31,2024?
- On January 1, 2021, Hornets Company sold land that originally cost P400,000 to Egi Company. As payment, Egi gave Hornets a P600,000 note. The note bears an interest rate of 8% and is to be repaid in three annual installments of P200,000 plus interest on the outstanding balance. The first payment is due on December 31, 2021. The market price of the land is not reliably determinable. The prevailing interest rate for notes of this type is 8%. How much is the interest revenue for the year 2022?On January 1, 2021, Ree Company sold a machine to Say Company. In lieu of cash payment, Say gave Ree a 5-year, P500,000 note. The machinery has a cost of P500,000 and accumulated depreciation as of January 1, 2021 of P150,000. The note is a non-interest bearing note and the prevailing rate of interest for a note of this type is 10%. Required: Answer the following questions: (Round off PV factors to 4 decimal places before multiplying.) 1. Current portion of the notes receivable 2. Non current portion of the notes receivableOn January 1, 2021, Ree Company sold a machine to Say Company. In lieu of cash payment, Say gave Ree a 5-year, P500,000 note. The machinery has a cost of P500,000 and accumulated depreciation as of January 1, 2021 of P150,000. The note is a non-interest bearing note and the prevailing rate of interest for a note of this type is 10%. Required: Answer the following questions: (Round off PV factors to 4 decimal places before multiplying.) 1. Gain or loss on sale of machinery (place parenthesis if loss) 2. Interest income
- On January 1,2021, ABC Corporation purchased a land for P 15,000,000. In exchange of the land, ABC issued a non-interest bearing note which is due on December 31,2025. There is no readily available market value for the building, but the current market rate of interest for comparable notes is 15%Assuming the notes was issued on June 1,2021, how much is the carrying value of the note as of December 31,2022?On January 1, 2018, Byner Company purchased a used tractor. Byner paid $5,000 down and signed a noninterest-bearing note requiring $25,000 to be paid on December 31, 2020. The fair value of the tractor is not determinable. An interest rate of 10% properly reflects the time value of money for this type of loan agreement. Thecompany’s fiscal year-end is December 31.Required:1. Prepare the journal entry to record the acquisition of the tractor. Round computations to the nearest dollar.2. How much interest expense will the company include in its 2018 and 2019 income statements for this note?3. What is the amount of the liability the company will report in its 2018 and 2019 balance sheets forthis note?On January 1, 2021, Marigold Corp. sold property to Cullumber Company which originally cost Marigold $2760000. There was no established exchange price for this property. Cullumber gave Marigold a $4170000 zero-interest-bearing note payable in three equal annual installments of $1390000 with the first payment due December 31, 2021. The note has no ready market. The prevailing rate of interest for a note of this type is 10%. The present value of a $4170000 note payable in three equal annual installments of $1390000 at a 10% rate of interest is $3456930. What is the amount of interest income that should be recognized by Marigold in 2021, using the effective-interest method? $417000. $0. $139000. $345693.