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4. What is the carrying amount of note payable on December 31, 2022? a. 942,400 b. 846,064 c. 742,400 d. 742,412

4. What is the carrying amount of note payable on December 31, 2022? a. 942,400 b. 846,064 c. 742,400 d. 742,412

FINANCIAL ACCOUNTING
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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Please answer number 4
4. What is the carrying amount of note pay able on Problem 23-15 (AICPA Adapted) On December 31, 2021, Bart Company purchased a mnchine in exchange for a noninterest bearing note requiring eight payments of P200,000. The first payment was made on December 31, 2021 and the others are due annually on December 31. At date of issuance, the prevailing rate of interest for this type of note was 11%. PV of an ordinary annuity of 1 at 11% for 8 periods 5.146 PV of an annuity of 1 in advance at 11% for 8 periods 5.712 1. What amount should be recorded as initial cost of the machine? a. 1,600,000 b. 1,029,200 c. 1,400,000 d. 1,142,400 2. What amount should be recorded as discount on note payable on December 31, 2021? a. 657,600 b. 457,600 c. 570,800 d. 3. What amount should be recorded as interest expense for 2022? a. 125,664 b. 103,664 c. 113,212 d. 176,000 December 31, 2022? a. 942,400 b. 846,064 c. 742,400 d. 742,412
Transcribed Image Text:4. What is the carrying amount of note pay able on Problem 23-15 (AICPA Adapted) On December 31, 2021, Bart Company purchased a mnchine in exchange for a noninterest bearing note requiring eight payments of P200,000. The first payment was made on December 31, 2021 and the others are due annually on December 31. At date of issuance, the prevailing rate of interest for this type of note was 11%. PV of an ordinary annuity of 1 at 11% for 8 periods 5.146 PV of an annuity of 1 in advance at 11% for 8 periods 5.712 1. What amount should be recorded as initial cost of the machine? a. 1,600,000 b. 1,029,200 c. 1,400,000 d. 1,142,400 2. What amount should be recorded as discount on note payable on December 31, 2021? a. 657,600 b. 457,600 c. 570,800 d. 3. What amount should be recorded as interest expense for 2022? a. 125,664 b. 103,664 c. 113,212 d. 176,000 December 31, 2022? a. 942,400 b. 846,064 c. 742,400 d. 742,412
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