2. Using the fact pattern presented in Exercise 8-15, prepare journal entries for CVC and Buffalo Supply on the following dates (for homework, you recorded the journal entries for CVC and Buffalo Supply on 1/1/2019 [20X3] only): a. 12/31/2019 [20X3] b. 12/31/2020 (20X4] c. 1/1/2021 [20X5]
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- Southtown Corporation purchased equipment and in exchange signed a two-year promissory note.The note requires Southtown to make a single payment of $100,000 in two years. Southtown hasother promissory notes that charge interest at the annual rate of 6 percent.Required:1. Compute the present value of the note, rounded to the nearest dollar, using Southtown’s typical interest rate of 6 percent.2. Show the journal entry to record the equipment purchase (round to the nearest dollar).3. Show the adjusting journal entry at the end of the first year to record interest on the note.Cool Globe Inc. entered into two transactions, as follows: Purchased equipment paying $20,000 at the date of purchase and signing a noninterest-bearing note requiring the balance to be paid in four annual installments of $20,000 on the anniversary date of the contract. Based on Cool Globe's 12% borrowing rate for such transactions, the implicit interest cost is $19,253. Purchased a tract of land in exchange for $10,000 cash that was paid immediately and signed a noninterest-bearing note requiring five $10,000 annual payments. The first annual payment of the note is due in one year. The fair value of the land is $46,000. Required:Prepare the journal entries for these transactions.American Food Services, Inc., acquired a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2021. In payment for the $4 million machine, American Food Services issued a four-year installment note to be paid in four equal payments at the end of each year. The payments include interest at the rate of 10%.Required:1. Prepare the journal entry for American Food Services’ purchase of the machine on January 1, 2021.2. Prepare an amortization schedule for the four-year term of the installment note.3. Prepare the journal entry for the first installment payment on December 31, 2021.4. Prepare the journal entry for the third installment payment on December 31, 2023.
- American Food Services, Inc., acquired a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2021. In payment for the $4.8 million machine, American Food Services issued a four-year installment note to be paid in four equal payments at the end of each year. The payments include interest at the rate of 12%. (FV of $1, PV of $1, FVA of $1, PVA of $1. FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare the journal entry for American Food Services' purchase of the machine on January 1, 2021. 2. Prepare an amortization schedule for the four-year term of the installment note. 3. Prepare the journal entry for the first installment payment on December 31, 2021. 4. Prepare the journal entry for the third installment payment on December 31, 2023. Complete this question by entering your answers in the tabs below. Req 2 Reg 13 and 4 Prepare an amortization schedule for the…Cool Globe Inc. entered into two transactions, as follows: 1. Purchased equipment paying $20,000 at the date of purchase and signing a noninterest-bearing note requiring the balance to be paid in four annual installments of $20,000 on the anniversary date of the contract. Based on Cool Globe's 12% borrowing rate for such transactions, the implicit interest cost is $19,253. 2. Purchased a tract of land in exchange for $10,000 cash that was paid immediately and signed a noninterest-bearing note requiring five $10,000 annual payments. The first annual payment of the note is due in one year. The fair value of the land is $46,000. Required: Prepare the journal entries for these transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 2. Record the noninterest bearing note payable for the purchase of equipment for which $20,000 paid as down payment and balance to be paid in…American Food Services, Inc., acquired a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2021. In payment for the $4.5 million machine, American Food Services issued a four-year installment note to be paid in four equal payments at the end of each year. The payments include interest at the rate of 10%. (FV of $1 PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare the journal entry for American Food Services' purchase of the machine on January 1, 2021. 2. Prepare an amortization schedule for the four-year term of the installment note. 3. Prepare the journal entry for the first installment payment on December 31, 2021. 4. Prepare the journal entry for the third installment payment on December 31, 2023. Complete this question by entering your answers in the tabs below. Req 2 X Answer is not complete. Req 1 3 and 4
- American Food Services, Inc., acquired a packaging machine from Barton and Barton Corporation. Barton andBarton completed construction of the machine on January 1, 2018. In payment for the $4 million machine, American Food Services issued a four-year installment note to be paid in four equal payments at the end of each year.The payments include interest at the rate of 10%.Required:1. Prepare the journal entry for American Food Services’ purchase of the machine on January 1, 2018.2. Prepare an amortization schedule for the four-year term of the installment note.3. Prepare the journal entry for the first installment payment on December 31, 2018.4. Prepare the journal entry for the third installment payment on December 31, 2020Harper Co. funds the acquisition of equipment on January 1, year 8 by issuing a $15,000 non-interest-bearing note payable. Beginning on December 31, year 8, the debt will be paid off in ten equal yearly payments. The market rate of interest for this sort of note is 5%. Given the facts below, how much should Harper Co. report the equipment on its December 31, year 8 balance sheet? For ten periods, the present value of $1 at 5% is 0.61391. The present value of a $1 regular annuity at 5% for ten periods is 7.72173. The current value of a $1 annuity payable in ten periods at 5% is 8.10782 8.10782Libby Company purchased equipment by paying $5,500 cash on the purchase date and agreed to pay $5,500 every six months during the next four years. The first payment is due six months after the purchase date. Libby's incremental borrowing rate is 6%. The equipment reported on the balance sheet as of the purchase date is closest to: (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided.) Multiple Choice $44,000. $44,108. $49,500. $38,608.
- Peabody Corporation purchased equipment and in exchange signed a three-year promissory note.The note requires Peabody to make a single payment of $20,000 in three years. Peabody has otherpromissory notes that charge interest at the annual rate of 6 percent.Required:1. Compute the present value of the note, rounded to the nearest dollar, using Peabody’s typicalinterest rate of 6 percent.2. Show the journal entry to record the equipment purchase (round to the nearest dollar).Libby Company purchased equipment by paying $5,600 cash on the purchase date and agreed to pay $5,600 every six months during the next four years. The first payment is due six months after the purchase date. Libby's incremental borrowing rate is 8%. The equipment reported on the balance sheet as of the purchase date is closest to: (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided.)Amber Mining and Milling, Inc., contracted with Truax Corporation to have constructed a custom-made lathe. The machine was completed and ready for use on January 1, 2021. Amber paid for the lathe by issuing a $600,000, threeyear note that specified 4% interest, payable annually on December 31 of each year. The cash market price of the lathe was unknown. It was determined by comparison with similar transactions that 12% was a reasonable rate of interest.Required:1. Prepare the journal entry on January 1, 2021, for Amber Mining and Milling’s purchase of the lathe.2. Prepare an amortization schedule for the three-year term of the note.3. Prepare the journal entries to record (a) interest for each of the three years and (b) payment of the note at maturity.