Analyzing Interest-Bearing and Noninterest-Bearing Notes Consider the following three separate scenarios for a one-year, $250,000 note payable issued on September 1, 2020. Complete the table, using the straight-line method to amortize any discount on mote payable. Note: Round your answers to the nearest whole dollar. Cash received upon note issuance Cash paid at maturity date Total interest paid (cash) Interest expense in fiscal year 2020 Interest expense in fiscal year 2021 Amount of liabilities reported on FYE 2020 balance sheet: Note payable (net) Interest payable FYE: Fiscal year-end $250,000 Note payable 12% Interest due at maturity 12% market rate Borrower's FYE*: Dec. 31 250,000 $ $250,000 Note payable 10% interest due at maturity 10% market rate Borrower's FYE: Nov. 30 $250,000 Note payable Noninterest-bearing 12% market rate Borrower's FYE: Dec. 31 $

Analyzing Interest-Bearing and Noninterest-Bearing Notes Consider the following three separate scenarios for a one-year, $250,000 note payable issued on September 1, 2020. Complete the table, using the straight-line method to amortize any discount on mote payable. Note: Round your answers to the nearest whole dollar. Cash received upon note issuance Cash paid at maturity date Total interest paid (cash) Interest expense in fiscal year 2020 Interest expense in fiscal year 2021 Amount of liabilities reported on FYE 2020 balance sheet: Note payable (net) Interest payable FYE: Fiscal year-end $250,000 Note payable 12% Interest due at maturity 12% market rate Borrower's FYE*: Dec. 31 250,000 $ $250,000 Note payable 10% interest due at maturity 10% market rate Borrower's FYE: Nov. 30 $250,000 Note payable Noninterest-bearing 12% market rate Borrower's FYE: Dec. 31 $

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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Check my wor Solve for maturity value, discount period, bank discount, and proceeds. Assume a bank discount rate of 9%. Use the ordinary interest method. (Use Days in a year table.) (Do not round intermediate calculations. Round your final answers to the nearest cent.) Face value Rate of Length of note Date note (principal) $26, 300 interest Maturity value Date of note discounted 9% 65 days Discount period Bank discount Proceeds March 17 April 20 days 24 $4 hp
K. Company B on October 1, 2020? What is the carrying value of the note received from 2-2 Notes Receivables The trial balance for BLUE Corporation prepared at December 31, 2020 showed a balance of P4,000,000 for Notes Receivables broken as follows: Notes receivable from Company A Notes receivable from Company B 3,000,000 1,000,000 Total 4,000,000 Additional information: The notes receivable from Company A is a three-year non- interest bearing note, with face value of P3,000,000. The note was received in exchange for a piece of land sold by BLUE on May 1, 2020. The land was carried in the books at the date of sale at P2,600,000. The difference between the face amount of the note and the carrying value of the land was credited to gain on sale of land. The market interest rate for a note of this type is 10%. The notes receivable from Company B bears interest at 10%. The note was received from sale of goods in the normal course of business. The note is dated October 1, 2020 and matures on…
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Accounting for notes receivable and accruing interest Carley Realty loaned money and received the following notes during 2018. Note Date Principal Amount Interest rate term April 1 $6000 7% 1 year Sept 30 $12000 6% 6 month Sept 19 $18000 8% 90 days Requirements Determine the maturity date and maturity value of each note. Journalize the entries to establish each Note Receivable and to record collection of principal and interest at maturity. Include a single adjusting entry on December 31, 2018, the fiscal year-end, to record accrued interest revenue on any applicable note. Explanations are not required. Round to the nearest dollar.
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