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A 21-month $6,779.99 promissory note bearing interest of 7.5% compounded monthly was sold on its date of issue to a finance company at a discount rate of 9.9% compounded monthly. Determine the proceeds of the sale
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- prepare a three-year (monthly) amortization schedule to classify the notes payable into its current and long-term amounts. See October 1, 2020 transaction for details of loan. October 1 - Bought office equipment for $15,000 and signed a three-year promissory note with a local bank. The annual interest rate is 5%, with monthly payments of $449.56 beginning on November 1.Akbar Associates issued 120-day note for $50,000 to a creditor on a account. The note was discounted at 6%. Assuming a 360-day year: a. What cash proceeds would Akbar receive from the note? b. How much would Akbar repay the creditor at the note's maturity? =On the first day of the fiscal year, Shiller Company borrowed $85,000 by giving a seven-year, 7% installment note to Soros Bank. The note requires annual payments of $15,772, with the first payment occurring on the last day of the fiscal year. The first payment consists of interest of $5,950 and principal repayment of $9,822. a. Journalize the entries to record the following: 1. Issued the installment note for cash on the first day of the fiscal year. If an amount box does not require an entry, leave it blank. - Select - - Select - - Select - - Select - 2. Paid the first annual payment on the note. If an amount box does not require an entry, leave it blank. - Select - - Select - - Select - - Select - - Select - - Select - b. Explain how the notes payable would be reported on the balance sheet at the end of the first year. Notes payable are reported as liabilities on the balance sheet. The portion of the note…
- On August 1, Batson Company issued a 60-day note with a face amount of $140,000 to Jergens Company for merchandise inventory. (Assume a 360-day year is used for interest calculations.) a. Determine the proceeds of the note assuming the note carries an interest rate of 6%. b. Determine the proceeds of the note assuming the note is discounted at 6%.BBY Company loaned $66,116 to Orwell, Inc, accepting Orwell's 2-year, $80,000, zero-interest-bearing note. The implied interest rate is 10%. Prepare BBY's journal entries for the initial transaction, recognition of interest each year, and the collection of $80,000 at maturity. Debit - Notes Receivable $80,000 Credit - Credit - Cash Debit - Credit - Debit - Credit - Interest Revenue 6.026 DEC 16 618 10Colson Company has a line of credit with Federal Bank. Colson can borrow up to $436,000 at any time over the course of the calendar year. The following table shows the prime rate expressed as an annual percentage along with the amounts borrowed and repaid during the first four months of the year. Colson agreed to pay interest at an annual rate equal to 2.00 percent above the bank's prime rate. Funds are borrowed or repaid on the first day of each month. Interest is payable in cash on the last day of the month. The interest rate is applied to the outstanding monthly balance. For example, Colson pays 6.25 percent (4.25 percent +2.00 percent) annual interest on $77,700 for the month of January. Amount Borrowed Prime Rate for the Month Month January February March April or (Repaid) $ 77,700 4.25% 120,700 (16,500) 28,400 3.25 3.75 4.25 Required a. Compute the amount of interest that Colson will pay on the line of credit for the first four months of the year. b. Compute the amount of…
- Lucky company borrowed an amount of money from ZER Finance Co. In return, ZER Finance Co received a $ 200,000, 4 year, 6% note from Lucky. On the date of the transaction, the market rate on interest was 8% for a similar note. Instructions: Calculate the net carrying value of the notes receivable on the books of ZER Finance, at the end of year one assuming that Zer is using effective interest method to amortize discount or premium on note receivable The following information might help you: Present value of a future sum factor, 6%, 4 years= 0.7921 Present value of a future sum factor, 8%, 4 years= 0.7350 Present value of an ordinary annuity factor, 6%, 4 years= 3.5 Present value of an ordinary annuity factor, 8%, 4 years= 3.3 (When writing your answer do not use commas or sign of the dollar. For example, if your answer is $1,500, write it as 1500) Answer:FDN Company received a four-month note receivable in the amount of P68,000,000 on September 1. The note requires interest at an annual rate of 9%. How much is the accrued interest income at the end of September?On January 1, Year 1, Mahoney Company borrowed $168,000 cash from Sun Bank by issuing a 5-year, 8% term note. The principal and interest are repaid by making annual payments beginning on December 31, Year 1. The annual payment on the loan equals $42.077, What is the amount of principal repayment included in the payment made on December 31, Year 1? Multiple Choice Ο Ο Ο Ο $13,440 $37.467 $40,725 $28,637
- On August 1, a $30,000, 6%, 3-year installment note payable is issued by Tart Company. The note requires equal payments of principal plus accrued interest be paid each yea on July 31. The annual payment will be: $11,200. $10,000. $11,223. $10,613.On August 1, Batson Company issued a 60-day note with a face amount of $91,800 to Jergens Company for merchandise inventory. (Assume a 360-day year is used for interest calculations. a. Determine the proceeds of the note assuming the note carries an interest rate of 12%. b. Determine the proceeds of the note assuming the note is discounted at 12%.Boyd Company has a line of credit with State Bank. Boyd can borrow up to $520,000 at any time over the course of the Year 1 calendar year. The following table shows the prime rate expressed as an annual percentage along with the amounts borrowed and repaid during Year 1. Boyd agreed to pay interest at an annual rate equal to 1 percent above the bank’s prime rate. Funds are borrowed or repaid on the first day of each month. Interest is payable in cash on the last day of the month. The interest rate is applied to the outstanding monthly balance. For example, Boyd pays 6 percent (5 percent + 1 percent) annual interest on $72,000 for the month of January. Month Amount Borrowed or (Repaid) Prime Rate for the Month January $ 72,000 5% February 52,000 5 March (46,000) 6 April through October No change No change November (36,000) 6 December (22,000) 5 Boyd earned $37,000 of cash revenue during Year 1.Required Prepare an income statement, balance sheetand statement of cash…
