provision las a lallaninAReceivable financing - Discounting of NotesP1,000,000, 6-month, 12% note, received from a customerJuly 1, 20x1, with a bank at 16%.Requirement: Provide the entry on Nov. 1 under each of thefollowing scenarios: the discounting is made on a (a) withoutrecourse basis, (b) with recourse basis – conditional sale, and (c) withrecourse basis - secured borrowing.

Note receivable is a financial instrument which is made by the borrower to the lender to a pay…

Answered: 10. On November 1, 20x1, Sunny Friday…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A P2,400,000, 6-month, 10% note dated May 1 is received from a customer by an entity and discounted with recourse by First Bank on July 1 at 12%. Based on conditional sale, compute for the following; a. Net proceeds b. Discount period c. Carrying amount of note receivable d. Gain or loss on note receivable discounting e. Journal entry for the conditional sale f. Journal entry, note is paid by maker on maturity g. Journal entry, note is dishonored by maker, entity pays the Bank the maturity value plus protest fee and other bank charges of P5,200.
If the discounting is secured borrowing, what is included in the journal entry to record the transaction? a. Debit loss on note receivable discounting Ᵽ87,000b. Debit interest expense Ᵽ87,000c. Credit liability for note discounted Ᵽ6,063,000d. Credit interest income Ᵽ63,000
Prepare journal entry required on january 15,2021 for Wilkinson SA and Huskie Financing
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Discounting of note receivable without recourse; A P2,500,000, 180-day, 10% note dated August 1 was received from a customer and discounted without recourse on September 30 at 12% discount rate. Compute for; Maturity value Discount Discount period Net proceeds from discounting Carrying amount of the notes receivable Gain or loss on note discounting (journal entry)
Tender company accepted from a customer a P4,000,000, 90-day,12% note dated August 32, 2020. On September 30, 2020, the entity discounted without recourse the note at 15%. However, the proceeds were not received until October 1, 2020. 1. What amount was received from the note receivable discounting? a. 4,017,000 b. 4,120,000 c. 4,103,000 d. 3,965,500 2. What amount should be reported as loss on note receivable discounting? a. 17,000 b. 23,000 c. 40,000 d. 0
Nates Payable A business issued a 90-day, 6% nole for $67,000 bo a creditor on account, [llustrate the effacts on the accounts and finannal statamants of recording (a) L'ie ssuance at the note and (b) the payment of the rote at maturity, including interest If ne accaunt or activity is affacted, selact "Na affect from the drapdewn list and eave the correspording umber entry box alar k. Enter account cecreeses end cash outfiows as negative amcunts.
On October 1. 2020, Shamrock, Inc. assigns $1,160.700 aof its accounts recelvable to Bridgeport National Bank as collateral for a $747,900 note. The bank assesses a finance charge of 3 of the receivables assigned and interest on the note of 9N Prepare the October 1 journal entries for both Shamrock and Bridgeport. fno entryis required, select "No Entry for the account titles and enter O for the amounts. Credit account titles are automutically indented when the amount is entered. Do not indent manually) Date Account Titles and Explanation Debit Credit Shamrock. Inc. Oct. 1 Bridgeport National Bank Oct. 1 Sheffield Incorporated factored $134.100 of accounts receivable with Engram Factors Inc. on a with recourse basis. Engram assesses a 2% finance charge of the amount of accounts receivable and retains an amount equal to 7% of accounts receivable for possible adjustments Prepare the journal entry for Sheffield to record the sale, assuming that the recourse liability has a fair value of…
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Note receivable Prefix Supply Company received a 120-day, 7% note for $84,000, dated April 12 from a customer on account. Assume 360-days in a year. a. Determine the due date of the note. b. Determine the maturity value of the note. $ c. Journalize the entry to record the receipt of the payment of the note at maturity. If an amount box does not require an entry, leave it blank. E
Amortize Discount by Interest Method On the first day of its fiscal year, Ebert Company issued $23,000,000 of 5-year, 10% bonds to finance its operations. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 12%, resulting in Ebert receiving cash of $21,307,304. The company uses the interest method. a. Journalize the entries to record the following: 1. Sale of the bonds. Round to the nearest dollar. If an amount box does not require an entry, leave it blank. Cash 21,307,304 Discount on Bonds Payable 1,692,696 Bonds Payable v 23,000,000 Feedback Check My Work 2. First semiannual interest payment, including amortization of discount. Round to the nearest dollar. If an amount box does not require an entry, leave it blank. Interest Expense v Discount on Bonds Payable v Cash v Feedback Check My Work
Subparts A-C are completed, please only complete D - G. Previous subpart answers: A. $ 851.68 B. $147,797 C. 7.50% Assume the following for a one-year adjustable rate mortgage loan that is tied to the one-year Treasury rate: Loan amount: Annual rate cap: Life-of-loan cap: Margin: First-year contract rate: One-year Treasury rate at end of year 1: One-year Treasury rate at end of year 2: Loan term in years: Required: Given these assumptions, calculate the following: a. Initial monthly payment. b. Loan balance end of year 1. $ 150,000 2% 5% 2.75% 5.50% 5.25% 5.50% 30 c. Year 2 contract rate, assuming the annual cap applies to the teaser rate. d. Year 2 monthly payment. e. Loan balance end of year 2. f. Year 3 contract rate, assuming the annual cap applies to the teaser rate. g. Year 3 payment.

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