a. On December 31, 2011, NFL restructured its Note Payable with face value of P2,000,000 and interest payable of P400,000 through an asset swap. NFL transferred an equipment with a cost of P2,000,000 and accumulated depreciation of P500,000 to the creditor as payment of the debt. The fair value of the equipment is P2,200,000.
Q: On January 1, 2022. TGIG sold equipment with historical cost of P10,000,000 and accumulated…
A: Carrying amount of the Note = Present value of the annual instalments where, Present value of the…
Q: Korean Short Ribs Company sold a tract of land with carrying amount of P3,000,000 to Instant Pot…
A: Formula: Notes receivable amount = Principal amount - Interest with installment amount.
Q: On January 1, 2010, WPK Co. sold a transportation equipment with a historical cost of P1,000,000 and…
A: Net cost of the equipment = Historical cost - Accumulated depreciation Present value of note = Face…
Q: On December 31, 2010, EEEE Company was indebted to AFE Company on a P2,000,000, 10% note. Only…
A: Note: Hi! Thank you for the question, As per the honor code, we are allowed to answer three…
Q: On December 31, 2021, LoL Co. was indebted to Garena Street Company on a P2M, 10% note. Only…
A: Debt Restructuring - It is kind of process which allows the public or private company facing cash…
Q: On January 1, 2021, Jungkook Company sold equipment at a cost of P700,000 and accumulated…
A: These decisions commit a firm to invest its current funds in the operating assets with the hope of…
Q: On January 1, 2021, Lorry Manufacturing Company purchased equipment from Wales Inc. There was no…
A: Lets understand the basics. When asset is purchased using zero interest bearing notes payable then…
Q: On December 31, 2010 a company was indebted to Creditor Co. on a P2,000,000 10% note. Only interest…
A: On 31.12.2010, 10% Notes payable = P2000000 Interest rate = 10% Interest amount per annum = P2000000…
Q: This Company informed That Company that it would be unable to repay its P1,000,000 bond payable due…
A: Answer: The settlement gain or loss is determined so that any amount received less than actual…
Q: On January 1, 2021, ABC Co. sold a transportation equipment with a historical cost of ₱1,000,000 and…
A: Present value of note receivable = Face value of note receivable x present value factor (12%, 4…
Q: Filipino Co. has been forced into bankruptcy and liquidated. Unsecured claims will be paid at the…
A: Bankruptcy and liquidation is a situation in which the operations of the business are shut down, the…
Q: what total amount of revenue (including interest) should Clark Inc. recognize from the construction…
A: Revenue can be defined as any sum of money received or to be received from the regular business…
Q: On January 1,2021, ABC Corporation purchased a land for P 15,000,000. In exchange of the land, ABC…
A: Face value of non-interest bearing note P1,50,00,000 Interest Rate 15% Period 5 years…
Q: What is the carrying amount of the note as of December 31, 2022? On January 1, 2022. TGIG sold…
A: Carrying amount of the Note = Present value of the annual instalments where, Present value of the…
Q: Lathrop Inc. purchased equipment on January 1, 2020, for $30,000 cash plus a note payable. The fair…
A: Mortgage Note Payable - A mortgage note payable is a written promise to repay a specific amount of…
Q: On January 1,2021, Fiona Co. sold an office equipment with cost of ₱1,000,000 and accumulated…
A: 1) Calculation of gain on sale of equipment - Present value of note receivable = 2000000 x…
Q: On December 31, 2009, Mill Co. sold construction equipment to Drew, Inc. for P1,800,00. The…
A: Correct answer is P 250,000 Total amount of revenue should mill recognise from the construction…
Q: Lathrop Inc. purchased equipment on January 1, 2020, for $150,000 cash plus a note payable. The fair…
A: Date Accounts, explanation and title Debit Credit 1 January 2020 Equipment (542,666 -…
Q: In 2X19, Land Corporation acquired land by paying P2,000,000 and signing a note with a face value of…
A: NOTE : As per BARTLEBY guidelines, when multiple sub parts are given then first three sub parts are…
Q: Korean Short Ribs Company sold a tract of land with carrying amount of P3,000,000 to Instant Pot…
A: Formula: Notes receivable amount = Principal amount - Installment amount with interest
Q: Due to financial difficulty and insolvency, NFL Inc. used different t regarding its debts on…
A: As per our protocol we provide solutions only to one questions but as you have asked multiple…
Q: On January 1,2021, XYZ Corporation purchased a land for P 15,000,000. In exchange of the land, ABC…
A: Face Value of non-interest bearing note P1,50,00,000 Interest Rate 15% Period 5 years Present…
Q: At January 1, 2018, Transit Developments owed First City Bank Group $600,000, under an 11% note with…
A:
Q: On July 31, 2021, Sampaguita Company borrowed from a bank via issuing a 13.5% note. Transaction…
A: The interest expense is the charge against the profit or net income of the business. It is shown in…
Q: How much is the interest expense for 2020?
A: Interest expenses are those expenses which the company has to pay on amount which is outstanding and…
Q: In 2X19, Land Corporation acquired land by paying P2,000,000 and signing a note with a face value of…
A: NOTE: As per BARTLEBY guidelines, when multiple sub parts are given then first three sub parts are…
Q: he following information are related to STANK Corporation which is undergoing liquidation: a. A bank…
A: Liquidation means where the company decide to close out the operations , sell all the assets and…
Q: Extended the maturity to December 31, 2X23. • The P480,000 interest due on December 31, 2X21 was…
A: NOTE : As per BARTLE BY guidelines, when multiple sub parts are given then the first three sub…
Q: On January 1, 2021, J Company sold equipment at a cost of P700,000 and accumulated depreciation of…
A: A note or debt where there is no requirement to pay-off the interest on note is known as…
Q: On January 01, 2021, CPA Company sold equipment costing P760,000 with accumulated depreciation of…
A: Solution: Present value of note on Jan 1, 2021 = P800,000 * PV of 1 at 5% for 4th period = P800,000…
Q: On December 31, 2021, LoL Co. was indebted to Garena Street Company on a P2M, 10% note. Only…
A: The gain on settlement is the difference between the exiting notes and the settlement amount paid…
Q: On January 1, 2018, Sana Madali Lang Company sold machinery costing P5,000,000 with accumulated…
A: Hello. Since your question has multiple sub-parts, we will solve the first three sub-parts for you.…
Q: On January 1, 20x1, ABC Co. sold machinery costing P3,000,000 with accumulated depreciation of…
A: Lets understand the basics. When asset is sold in exchange of non interest bearing notes then amount…
Q: Chico Company entered into a troubled debt restructuring agreement with Social Bank. The bank agreed…
A: Gain on extinguishment of debt = note payable carrying amount - fair value of land
Q: On July 31, 2021, Sampaguita Company borrowed from a bank via issuing a 13.5% note. Transaction…
A: The interest expense is the charge against the profit or net income of the business. It is shown in…
Q: Korean Short Ribs Company sold a tract of land with carrying amount of P3,000,000 to Instant Pot…
A: Formula: Notes receivable amount = Principal amount - Interest amount with installment
Q: what total amount of revenue (including interest) should Clark Inc. recognize from the construction…
A: Revenue can be defined as any sum of money received or to be received from the regular business…
Q: On January 1, 2018, Sana Madali Lang Company sold machinery costing P5,000,000 with accumulated…
A: The notes receivable is an account in the balance sheet of an organization generally under the…
Q: The following information is related to STANK Corporation which is undergoing liquidation: a. A bank…
A: Answer - Step 1 Calculation of Free Assets Particulars…
Q: On January 1, 2012, Manila Company purchased a machine under the following terms: a. 100,000…
A: Present value refers to the current value of a sum that is receivable in the future.
Q: On July 31, 2021, ABC Company borrowed from a bank via issuing a 13.2% note. Transaction costs of…
A: No expense in 2020 because no point related to the 2020 year. Where as in 2021 the interest expense…
Q: On January 1, 2014, ENERVATE TO WEAKEN Company had the following borrowings made for general…
A: Calculation of capitalisation rate : Loan Interest paid Average borrowed funds 12%…
Q: Korean Short Ribs Company sold a tract of land with carrying amount of P3,000,000 to Instant Pot…
A: Current assets are the assets that are usable for a short period of time generally for a year or…
Q: On December 31, 2021, Empoy Company has overdue notes payable of P5,000,000 with accrued interest of…
A:
Q: On January 1, 2022. TGIG sold equipment with historical cost of P10,000,000 and accumulated…
A: Carrying amount of the Note = Present value of the annual instalments where, Present value of the…
Q: On July 1, 2021, Markwell Company acquired equipment. Markwell paid $167,500 in cash on July 1,…
A: Presents value represents the current value of the amount of money.
Notes payable and Debt restructuring
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Marmol Corporation uses the allowance method for bad debts. During 2019, Marmol charged 50,000 to bad debt expense and wrote off 45,200 of uncollectible accounts receivable. These transactions resulted in a decrease in working capital of: a. 0 b. 4,800 c. 45,200 d. 50,000On December 31, 2011, Gorilla Company was experiencing financial difficulties and entered into a debt restructuring agreement with the creditor. The creditor restructured the obligation as follows: The principal was reduced from P10,000,000 to P9,800,000 Forgave the accrued interest of P1,200,000. Extended the maturity date from December 31, 2011 to December 31, 2014. • Reduced the interest from 12% to 10%. Interest is payable on December 31, 2012, 2013 and 2014. How much should the creditor report as loss on debt restructuring? (Ignore income taxes and carry present value factors to 5 decimal places.)18. The statement of affairs of Darrell Putix Co. indicates that unsecured creditors without priority with total claims of P720,000 may expect to recover only P288,000 after all the assets are sold. Among the creditors of Darrell Putix Co. are the following: • Government – taxes payable of P400,000, inclusive of P80,000 assessments and surcharges. • XYZ bank – loan payable of P4,000,000 and accrued interest of P200,000, backed by collateral security with realizable value of P4,800,000. • Alpha Financing Co. – loan payable of P3,200,000 backed by collateral security with realizable value of P2,000,000. • Mr. Bombay – loan payable of P1,000,000 and accrued interest of P200,000. No collateral security. How much is the expected recovery of Mr. Bombay? a. 780,000 b. 480,000 c. 288,000 d. 0
- ABC Company after having experienced financial difficulties in 2020 negotiated with a major creditor and arrived at an agreement to restructure its notes payable on December 31, 2020. The creditor was owed principal of P3,600,000 and interest of P400,000 but agreed to accept an equipment worth P700,000 and notes receivable from an ABC Company's customer with carrying amount of P2,700,000. The equipment had original cost of P900,000 and accumulated depreciation of P300,000. How much should be recognized as gain from debt restructuring on December 31, 2020? Round answer to whole number.3. Down Company has an overdue Notes Payable to City Bank of P8,000,000 and recorded accrued interest of P640,000 based on 8% interest rate. This rate of interest is presumed to be the market rate at the time of debt restructuring. As a result of a settlement on December 31, 2012, City Bank agreed to these restructuring arrangements: reduce the principal obligation to P6,000,000; forgive the P640,000 accrued interest; extend the maturity date to December 31, 2014; and annual interest of 10% is to be paid on December 31, 2013 and 2014.What is Down Company's gain on debt restructuring? (Round off present value factors to four decimal places) a. P 2,640,000 b. P 2,426,220 c. P 1,440,000 O d. POOn December 31, 2010 a company was indebted to Creditor Co. on a P2,000,000 10% note. Only interest had been paid to date. Due to its financial difficulties, the company has negotiated a restructuring of its note payable. The parties agreed that the company would settle the debt on the following terms: settle 1/2 of the note by transferring land with a recorded value of P800,000 and a fair value of P900,000 • settle 1/4 of the note by transferring 200,000 shares of P1 par ordinary shares with a fair market value of P15 per share modify the terms of the remaining 1/4 of the note by reducing the interest rate to 5%, extend the due date 3 years from the date of restructuring and reducing the principal to P300,000. How much was the (1) total gain on extinguishment of debt and (2) carrying amount of the note payable as of December 31, 2021? O P437,306 and P273,963 O P550,006 and P142,494 O P336.306 and P262,694 O P437,306 and P262.694
- 53. CPA Company used the allowance method of accounting for uncollectible accounts. During 2021, the entity had charged 750,000 to bad debt expense and wrote off accounts receivable of 780,000 as uncollectible. What was the decrease in working capital?2. On December 31, 2012, Greendale Corporation is experiencing extreme financial pressure and is in default in meeting interest payments on its long-term note of P6,000,000 due on December 31, 2013. The interest rate is 10% payable every December 31. In an agreement with the creditor, Greendale Corporation obtained certain changes in the terms of the note as listed in the image below. What is Greendale Corporation's gain on debt restructuring? (Round off present value factors to four decimal places) * • The accrued interest of P600,000 on December 31, 2012 is forglven. • The principal is reduced by P1,000,000. • The new interest rate is 12%. • The new date of maturity is December 31, 2017. At the time of restructuring, the stated rate of interest of the original obligation prevailed in the market for similar notes. O a. P 1,979,180 O b. P 1,600,000 O c. P1,221,020 O d. PO39. Haru Company sold accounts receivable without recourse for P10, 600,000. Mild company received P10, 000,000 cash immediately from the factor. The remaining P600, 000 will be received once the factor verifies that none of the accounts receivable is in dispute. The accounts receivable had a face amount of P12, 000,000. Mild company had previously established an allowance for bad debts of P500, 000 in connection with these accounts. How much is the loss on factoring?
- 2. On December 31, 2012, Greendale 2 Corporation is experiencing extreme financial pressure and is in default in meeting interest payments on its long term note of P6,000,000 due on December 31, 2013. The interest rate is 10% payable every December 31. In an agreement with the creditor. Greendale Corporation obtained certain changes in the terms of the note as listed in the image below. What is Greendale Corporation's gain on debt restructuring? (Round off present value factors to four decimal places) * •The accrued interest of P600,000 on December 31, 2012 is forgiven •The principal is reduced by F1,000,000. •The new interest rate is 12%. •The new date of maturity is December 31, 2017. At the time of restructuring, the stated rate of interest of the original obligation prevailed in the market for similar notes a. P 1,979,180 b. P 1,600,000 c. P 1,221,020 d. P019. On December 31, 2012, Guimary Corporation is experiencing extreme financial pressure and is in default in meeting interest payment in its long-term note of P6,000,0O00 due on December 31, 2013. The interest rate is 10% payable every December 31. In an agreement with the creditor, Guimary Corporation obtained the changes in the terms of the note as shown in the image. At the time of restructuring, the stated rate of interest of the original obligation prevailed in the market for similar notes. What is Guimary Corporation's gain on debt restructuring? * The accrued interest of P600,000 on December 31, 2012 is forgiven. The principal is reduced by P1,000,000. The new interest rate is 12%. The new date of maturity is December 31, 2017. a. P1,979,180 b. P1,600,000 c. P1,221,020 d. POThe beginning balance in the Allowance for Doubtful Accounts is $47767 cr.. During the year a total of $41485 of accounts were written off and $4997 of accounts previously written off were recovered. The company estimates that the ending balance in the Allowance for Doubtful Accounts should be $60647. What is the bad debt expense for the year? Select one: O a. $49368 O b. $60647 Oc. $41485 O d. $36488