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 interest expense for the year 2022?
Q: On January 1, 2021, the Montgomery Company agreed to purchase a building by making six payments. The…
A: Step 1: 1. Compute the amount at which the cost of the building should be recorded as follows:
Q: On January 1,2021, Josh Co. sold a machine to Groban Co. In lieu of cash payment, Groban gave josh a…
A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: On January 1,2021, ABC Corporation purchased a land for P 15,000,000. In exchange of the land, ABC…
A: Face value of non-interest bearing note P1,50,00,000 Interest Rate 15% Period 5 years…
Q: On July 1, 2021, Apache Company, a real estate developer, sold a parcel of land to a construction…
A: Accrual basis accounting: According to this basis of accounting, revenue should be recognized at the…
Q: On January 1, 2022, Colorado Company sold a machinery with an acquisition cost of P 1,000,000 and…
A: Present value of the bonds = Present value of principal + Present value of interest payments = face…
Q: ) On July 31, 2020, Amsterdam Company engaged Minsk Tooling Company to construct a special-purpose…
A: a. Calculate weighted-average accumulated expenditures, avoidable interest, and total interest…
Q: On July 31, 202O, Teal Company engaged Minsk Tooling Company to construct a special-purpose piece of…
A: The question is based on the concept of Financial Accounting.
Q: On January 1, 2020, CullumberCorporation sold a building that cost $261,490 and that had accumulated…
A: Accumulated depreciation can be defined as the sum of total depreciation that is charged against the…
Q: On January 1, 2020, ABC Company sold a piece of land for P10,000,000. The company received a 10%,…
A: The asset is sold in exchange of a financial asset, which is a 10 year 10% note, whose carrying…
Q: On January 1, 2020, Mil Company sold a building and received as consideration P1,000,000 cash and a…
A: Given, Book Value = P 1,000,000 Face Value = P 4,000,000 Rate = 10% Present Value = 0.75
Q: On January 1,2021, ABC Corporation purchased a land for P 15,000,000. In exchange of the land, ABC…
A: Face value of non-interest bearing note P1,50,00,000 Interest Rate 15% Period 5 years…
Q: On January 1, 2019, Tabor Company sold land with a book value of $50,000 to Wilson Company,…
A: Part 1: Present value is calculated for the firm as: Present value=$60,000×0.797(PVT)=$47,820 Tabor…
Q: On January 1, 2021, Dreamlover Corporation purchased equipment from Daydream Company for P3,600,000.…
A: Present value refers to the current value of all the cash flows which is to be received in the…
Q: On July 31, 2020, Ivanhoe Company engaged Minsk Tooling Company to construct a special-purpose piece…
A: SOLUTION- ACCUMULATED DEPRECIATION IS THE TOTAL AMOUNT AN ASSET HAS BEEN DEPRECIATED UP UNTIL A…
Q: On July 31, 2020, Marin Company engaged Minsk Tooling Company to construct a special-purpose piece…
A: Solution:- a) Calculation of the interest revenue as follows:-
Q: On May 1, 2022, Cuba Company purchased factory machinery having an installment price of P4,000,000.…
A: Cash price of equipment = Down payment + Present value of installments = P1,000,000 + (P4,000,000 -…
Q: these assets during 2020 was $2470000. To help pay for construction, $1710000 was borrowed at 11% on…
A: The correct answer option is $264,100 = Construction Loan × Rate of borrowing +…
Q: On January 1,2021, Josh Co. sold a machine to Groban Co. In lieu of cash payment, Groban gave josh a…
A: Depreciation: It is the gradual fall in the value of the asset due to its normal usage in the…
Q: On January 1, 2019, Mariz Company acquired a tract of land for 21,000,000. The entity paid a…
A: Face value of Note = Cost of land - down payment = 21,000,000 - 5,000,000 = 16,000,000
Q: On January 1, 2020, Miller Inc. sells equipment to Smith Inc. for $132,000. As stipulated in the…
A: NOTE: “Since you have posted a question with multiple sub-parts, we will solve first three subparts…
Q: On January 1,2021, XYZ Corporation purchased a land for P 15,000,000. In exchange of the land, ABC…
A: Face Value of non-interest bearing note P1,50,00,000 Interest Rate 15% Period 5 years Present…
Q: On January 1, 2020, CPA Corporation sold a piece of equipment that was acquired ten years ago for…
A: Solution: Fair value of equipment sold = Present value of non interest bearing note = P300,000 * PV…
Q: On January 1, 2020, VKS Corporation sold a piece of equipment that was acquired ten years ago for…
A: Net book value of equipment sold = Purchase costs - accumulated depreciation = P350,000 - 240,000…
Q: On December 30, 2021, Jack company purchased an aircraft from Jill Co. in exchange for a noninterest…
A: Answer to Question: Cost of the Machine is the Present Value of Non Interest bearing Note…
Q: On January 1, 2020, Toot Company sold a piece of equipment costing P1,500,000 with accumulated…
A: Basic Accounting Non Interest bearing note, Valuation and amortization
Q: Answer each of these unrelated questions. a. On January 1, 2020, Fishbone Corporation sold a…
A: Hey, since there are multiple questions posted, we will answer first question. If you want any…
Q: On January 1, 2020, Karakaraka Co. started construction of a new office building on January 1, 2020,…
A: Borrowed funds used for building=P20,0002=P10,000
Q: On July 31, 2020, Marin Company engaged Minsk Tooling Company to construct a special-purpose piece…
A: Journal entries are posting of transactions in the books of company and then it is analysed as well…
Q: On January 1, 2019, Format Company sold a tract of land that was acquired several years ago for…
A: solution : given face value of note =4,500,000 coupon rate = nil market…
Q: On January 1, 2021, Abba Company sold a piece of equipment to Bacus Company with a cost of…
A: Annual Payment = P×r×1+rn1+rn-1 where, P= principal amount= P4,000,000 r= rate of interest= 10% n=…
Q: On July 1, 2021, LIBAGO Company sold a machine costing P500,000 with accumulated depreciation of…
A: Profit or loss of the company is measured by preparing income statement which shows the difference…
Q: On January 1, 2020, TPM Inc. acquires a piece of equipment for a list price of $300,000. It pays…
A: 1. Journal entries in the books of TPM Inc. Date Particulars Debit Credit 1-Jan-20 Property,…
Q: Please give a detailed solution On January 1, 2020, TPM Inc. acquires a piece of equipment for a…
A: 1) Journal Entries for the Year 2020 and 2021
Q: What is the interest income for the year 2023? How much is the total proceeds of Squirtle for the…
A: Answer:
Q: On July 1, 2018, Apache Company, a real estate developer, sold a parcel of land to a construction…
A: Given information is: On July 1, 2018, Apache Company, a real estate developer, sold a parcel of…
Q: On October 1, 2020, ABC Manufacturing sold a tract of land that originally cost P400,000. ABC…
A: Present value of the Note on October 1, 2020 = Present value of principal + Present value of…
Q: On January 1, 2019, Bestbuy Inc. purchased land that had an assessed value of P6,000,000 at the time…
A: Present value of non-interest-bearing note on January 1, 2019 = Face value of non-interest-bearing…
Q: On January 1, 2021, Anna Company sold a piece of equipment to Banana Company with a cost of…
A: Basic Accounting Concept Sales of Assets in exchange of Note receivable Amortization of Loan…
Q: On January 1, 2020, Kingbird Corporation sold a building that cost $257,510 and that had accumulated…
A: Net Book Value of Building = Cost of the Building - Accumulated depreciation =$257,510 - $102,150…
Q: Suri Company is a dealer of real properties. On June 30, 2020, it sold a parcel of land with a tax…
A: Installment Sales Method Under the installment sales method the recognition of revenue which are…
Q: On January 1, 2018, Sana Madali Lang Company sold machinery costing P5,000,000 with accumulated…
A: Hello. Since your question has multiple sub-parts, we will solve the first three sub-parts for you.…
Q: On June 30, 2021, Kimberly Farms purchased custom-made harvesting equipment from a local producer.…
A:
Q: On January 1 ,2020 ABC Company sold a building and received as consideration P1,000,000 cash and…
A: Noninterest bearing note = P4,000,000 Interest rate = 10% Present value of 1 at 105 for three…
Q: On January 1, 2022, Jantzen Company sold land to Dansko Company. There was no established market…
A: Carrying Amount of Notes = Beginning Balance + Interest Accrued - Principal repaid
Q: On January 1, 2018, the Montgomery Company agreed to purchase a building by making six payments. The…
A: 1)
Q: On January 1, 2020, Physanto Corp. received in exchange for equipment sold to Viva Inc., an 8%…
A: The following calculations are done in the records of Physanto Corporation to evaluate the equipment…
Q: On January 1, 2020, The Corporation sold a piece of equipment that was acquired ten years ago for…
A: Solution: Fair value of equipment = Present value of note = P300,000 * PV of 1 at 12% for 2nd period…
Q: On January 1,2021, ABC Corporation purchased a land for P 15,000,000. In exchange of the land, ABC…
A: When an item of property, plant and equipment is acquired through an issue of monetary or…
Q: On January 1, 2020, Advanced Study Company sold a piece of land with a carrying amount of P8,000,000…
A: Amortization: When the market rate of interest is different from the coupon rate or carrying rate,…
Q: On January 1, 2019, Mar Co. sold a piece of equipment acquired ten years ago for P35,000. At the…
A: Solution: Fair value of equipment sold = Present value of note = P30,000 * PV of 1 at 12% for 2nd…
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 interest expense for the year 2022?
Step by step
Solved in 2 steps
- 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 interest expense for year 2022?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%At what amount should the note be recorded on January 1, 2021?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 1,2021, 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, 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 carrying value of the notes to be shown on December 31,2023 Statement of financial position?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 should be presented as non-current liabilities in the notes payable balance as of December 31,2021 in the statement of financial position?
- On January 1,2021, XYZ 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 should be presented as non-current liabilities in the notes payable balance as of December 31,2021 in the statement of financial position?On January 1, 2020, Shamrock Inc. bought land that had an assessed value of $390,000 at the time of purchase. A $560,000, non–interest-bearing note due on January 1, 2023, was given in exchange. There was no established exchange price for the land, and no ready market value for the note. The interest rate that is normally charged on a note of this type is 15%.Using (1) factor tables, (2) a financial calculator, or (3) Excel function PV, determine at what amount the land should be recorded at January 1, 2020. (Hint: Refer to Chapter 3 for tips on calculating.) Determine the interest expense to be reported in 2020 related to this transaction. Please show how to calculate in ExcelOn January 1, 2023, Hornets Company sold land that originally cost P400,000 to the 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, 2023. The market price of the land is not reliably determinable. The prevailing interest rate for notes of this type is 8%. Question:31. How much is the interest revenue for the year 2023? A. P67,217B. P57,643C. P51,250D. P48,000
- On January 1, 2023, Hornets Company sold land that originally cost P400,000 to the 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, 2023. The market price of the land is not reliably determinable. The prevailing interest rate for notes of this type is 8%. Question:32. Using the assumption of No. 30 (which is 12% interest rate for notes instead of 8%), what is the amortized cost of the note receivable at December 31, 2023? A. P600,000B. P400,000C. P379,355D. P290,003On January 1, 2023, Hornets Company sold land that originally cost P400,000 to the 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, 2023. The market price of the land is not reliably determinable. The prevailing interest rate for notes of this type is 8%. Question:28. How much is the gain on the sale of land? A. P400,000B. P200,000C. P103,105D. P66,667On January 1, 2023, Hornets Company sold land that originally cost P400,000 to the 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, 2023. The market price of the land is not reliably determinable. The prevailing interest rate for notes of this type is 8%. Question:30. Assume the same facts given in the problem, but change the prevailing interest rate for notes of this type to 12% (instead of 8%). At how much should the note be recorded on January 1, 2023? A. P600,000B. P560,138C. P480,360D. P427,080