ACG 4111 Final Exam review Questions

On June 1, 2021, Dirty Harry Co. borrowed cash by Issulng a 6-month noninterest-bearing note with a maturity value of $550,000 and a discount rate of 9%. Assuming straight-line amortization of the discount, what Is the carrylng value of the note as of September 30, 2021? (Round all calculations to the nearest whole dollar amount.) Multiple Cholce $591,250. $525,250. $508,750. $541,750.

On June 1, 2021, Dirty Harry Co. borrowed cash by issuing a 6-month noninterest-bearing note with a maturity value of $430,000 and a discount rate of 7%. Assuming straight-line amortization of the discount, what is the carrying value of the note as of September 30, 2021? (Round all calculations to the nearest whole dollar amount.)

65. Borrowed P100,000 by issuing a 1-year note with 7% annual interest to Century Savings Bank on October 1, 2021. What is the adjusting entry on December 31, 2021? A. Debit: Interest Expense and Credit: Interest Payable P1,750 B. Debit: Interest Expense and Credit. Interest Payable P7,000 C. Debit: Interest Expense and Credit: Interest Payable P3,500 D. Debit: Interest Expense and Credit: Interest Payable P5,250

2. On July 1, 2019, XYZ Co. borrowed P2,000,000 and Issued a one-year promissory note. The lender discounted the note at 12%. (a) Give the journal entries on July 1, 2019, December 31, 2019 to accrue interest on the note and July 1, 2020, upon maturity of the note. (b) What is the carrying amount of the note payable as of July 1, 2019 and December 31, 2019. Show them in good form. *

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3. Assume the following information regarding a note received by LENDYOU Company: January 1, 2020 6 months Date of note Term of note Interest rate 12% Date of discounting Discount rate March 1, 2020 15% Accrued interest on note P15,000 How much is the carrying amount of the note receivable on March 1, 2020?

1. On November 1, 2021, FDN Trading accepted a 90-day, 8% P10,000,000 note from ABC Co. FDN immediately discounted with recourse the note to a bank that offers a 15% discount rate. On maturity date, ABC Co dishonoured the note. The bank charged processing fee of P80,000. How much is the total receivable of FDN Trading from ABC Co?   2. On November 10, 2021, FDN Trading purchased goods for resale at a list price of P500,000 less 10-5 on terms 40% down payment, balance 2/10, n/30.  On November 13, FDN issued a debit memo for defective merchandise purchased amounting to P10,500.  The account was paid in full on November 30, 2021.   How much is the amount to be recorded as Purchases on November 10, 2021?   3. On November 15, FDN Trading signed a P370,000, 13 percent, 180-day note payable with the bank. The note was issued at a discount. How much cash did FDN Trading receive from this transaction?

2. A 216-day, 6% promissory note with a face value RM6000 was discounted 76 days before the maturity date at 4.5% discount rate. If the date of the note was 4h June 2020. Using Banker's Rule. No use excel. Calculate d) The amount of proceeds (RM6154.02) e) The amount of discount (RM59.02)

On June 30, 2020, Bosom Company discounted at the bank a customer's P6,000,000, 6-month, 10% note receivable dated April 30, 2020. The bank discounted the note at 12%. 1. What amount should be reported as net proceeds from the discounted note receivable?  a. 5,640,000  b. 5,760,000  c. 6,048,000  d. 6,174,400 2. What is the loss on note receivable discounting?  a. 252,000  b. 152,000  c. 52,000  d. 48,000

Question. During 2024, Royal Co. borrowed cash from another company by issuing notes payable as follows: 1. July 1, 2024, issued an 5 month, 7% note for $65,000. Interest and principal are payable at maturity. 2. November 1, 2024, issued a 3 month, 5% note for $40,200. Interest is payable monthly on the first day of the month. Principal is payable at maturity Royal has a December 31 fiscal year end and prepares adjusting entries on an annual basis. b) Prepare the necessary interest payment transactions for Royal in 2024 and 2025. Prepare separate adjusting entries for each note. Give an explanation for each entry and date used for a better understanding please.

26 On October 31, 2022, BB Company discounted at the bank a customer’s P600,000 interest-bearing note, 6-month, 12% note, dated July 1, 2020 with recourse. The bank discounted the note at 10%.  How much is the gain or loss should the company recognize as a result of discounting the notes receivable?

2. A 216-day, 6% promissory note with a face value RM6000 was discounted 76 days before the maturity date at 4.5% discount rate. If the date of the note was 4h June 2020. Using Banker's Rule. No use excel. Calculate a) The discount date (22/10/2020) b) The maturity date of the note (6/1/2021) c) The maturity value of the note (RM6213.04) d) The amount of proceeds (RM6154.02) e) The amount of discount (RM59.02)

Zuhoor Muscat Company borrowed RO 300,000 from the bank signing a 8%, 3-month note on December 1, 2020. The recorded amount of accrued interest expense on December 31, 2020 will be: O a. RO 4,000. O b. None of the options are correct. O c. RO 2,000. O d. RO 300,000. O e. RO 6,000.

On June 30, 2020, GHI Company discounted at the bank a customer P6,000,000, 6-month, 10% note receivable dated April 30,2020. The bank discounted the note at 12%. What amount should be reported as net proceeds from the discounted note receivable?

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Problem: ABC Company issued a promissory note to RCBC Bank. Details from the promissory note are as follows: Date of note: November 1, 2020 Term of note: 180 days Principal: P120,000 Interest rate: 12% Determine the following: 1. What is the account to be credited on the adjusting entry on December 31, 2020? 2. How much is the amount to be credited on December 31, 2020? 3. How much is the total interest expense for the full term of the note.

1. Compute the amount of interest during 2021, 2022, and 2023 for the following note receivable: On May 31, 2021, Washington State Bank loaned $260,000 to Paul Mara on a two-year, 12% note. 2. Which party has a(n): (a) note receivable? (b) note payable? (c) interest revenue? (d) interest expense? 3. How much in total would Washington State Bank collect if Paul Mara paid off the note early on November 30, 2021? 1. Compute the amount of interest during 2021, 2022, and 2023 for the following note receivable: On May 31, 2021, Washington State Bank loaned $260,000 to Paul Mara on a two-year, 12% note. (Round the interest amounts to the nearest whole dollar.) Year 2021 2022 2023 Amount of interest

. On April 30, 2022, Lenny Inc. borrowed $10 million cash from Colonial Bank and issued a 5-month, noninterest-bearing note, priced to yield an effective interest rate of 10%. The stated discount rate on this loan is:   A. More than the effective interest rate. B. Less than the effective interest rate. C. Equal to the effective interest rate. D. Unrelated to the effective interest rate

On January 1, 2019, Love Co. sold merchandise to Kit Store in exchange for a non-interest bearing note requiring 10 annual payments of P100,000. Kit Store made the first payment on December 31, 2019. The prevailing market interest rate for similar notes is 8%. a. How much is the value of notes receivable as of December 31, 2020?  b. How much is the Interest income recognized during 2020?

Fill in the blanks: On Jan 1, 2021, XYZ Co. sold a machine in exchange for a P1500,000, non-interest-bearing note receivable in a lump sum payment on December 31, 2024. The prevailing interest rate for this type of note is 10%. How much is the carrying amount of the note on January 1, 2021? How much is the unearned income on Dec 31, 2022? ( Previous Continue >

On June 30, 2020, Dive Company discounted at the bank a customer's P6,000,000, 6-month, 10% note receivable dated April 30, 2020. The bank discounted the note at 12%. 1.What amount should be reported as net proceeds from the discounted note receivable? 2.What is the loss on note receivable discounting?

19. The following balances were reported by Nagpapangap Company on December 31, 2020 and 2019: 2020: Accounts payable - P3,500,000; Notes payable - P4,000,000 2019: Accounts payable - P2,500,000; Notes payable - P1,500,000 On July 1, 2020, the company issued a one-year, 12% note for a bank loan of P1,000,000. All other notes payable arose from purchases of merchandise. Total payment to suppliers in 2020 amounted to P11,000,000, after purchase discount of P250,000. During 2020, company returned defective merchandise costing P500,000. What is the amount of gross purchases for 2020 under the accrual basis?Choices:  P14,250,000 P11,000,000 P12,450,000 P18,250,000

On 1/1/17, Carl Weathers Corp. purchases an asset and promises to make four annual payments of $10,000 each December 31 (beginning 12/31/17). The market rate of interest for notes of similar risk is 7%. What would you record for Discount on Notes payable on 12/31/2018? Debit Discounts on Notes Payable for 1,837 Credit Discount on Notes Payable for 1,837 Debit Discount on Notes Payable for 1,266 Credit for Discount on Notes Payable for 1,266 X

Answer the following questions regarding a four-month promissory note for $1,850 issued June 1, 2021, and bearing an interest rate of 5% p.a. a) What was the maturity date of the note? b) How much was the note worth at maturity? c) How much was the note traded for on Sep 1, 2021, if money was worth 6% p.a.?

1. On December 31, 2018, Conchita Martinez Company signed a P1,000,000 noninterest bearing note to Sauk City Bank. The market interest rate at that time is 12%. The stated interest rate on the note was 10%, payable annually. The note matures in 5 years. Considering these data, the bank released cash to the company amounting to P927,908; i.e., the total of the present value of the principal and interest. Unfortunately, because of lower sales, the company's financial situation worsened. On December 31, 2020, when the carrying amount of the loan is determined to be P951,968, Sauk City Bank determined that it was probable that the company would pay back only P600,000 of the principal at maturity. However, it was considered likely that interest would continue to be paid, based on the P1,000,000 loan. The present value of 1 at 12% for 3 years is 0.71178 and the present value of an ordinary annuity of 1 at 12% for 3 years is 2.40183. 1.In the note amortization schedule before impairment, how…

Rakesh

On November 1, 2021, FDN Trading accepted a 90-day, 8% P45,000,000 note from ABC Co. FN immediately discounted with recourse the note to a bank that offers a 12% discount rate. FDN assumes the interest expense associated with this transaction. How much interest expense should FN Trading debit on its records? Calculate the total interest expense and NOT the net interest expense.