Please need answer Assume your company just sold a mainframe computer. Thecomputer originally cost $300,000 and had accumulateddepreciation of $100,000 on the date of the sale. Instead ofthe buyer paying cash, she gave you a $400,000noninterest-bearing note due and payable in 3 years. Thereis no established exchange price for the computer, and thenote has no ready market. The prevailing rate of interest fora note of this type is 8%. What should your company recordas a gain from the sale of this computer?

Step 1: Define Time Value of MoneyTime value of money suggests that the money you have today is…

Answered: Assume your company just sold a…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 23MC: Orion Rentals is unable to collect on a note worth $25,000 and has accumulated interest of $250. It...

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Ecobank holds ¢450million T-Bill but is in short of cash. It needs cash to meet the requirement of a customer who has come to withdraw ¢400million.You have been asked to approach Barclays Bank to sell the T-Bill for ¢395.5million on Monday morning with agreement to repurchase the bill on Friday evening. (a) How much in cedis does Ecobank lose in this transaction (b) What is the Repo Rate on this transaction?
Suppose someone offered to sell you a note calling for the payment of $1,000 in two years (or 730 days). They offer to sell it to you for $850. You have $850 deposit in a bank that pays a 6.76649% nominal rate with daily compounding, and you plan to leave the money in the bank unless you buy the note. The note is not risky--you are sure it will be paid on schedule. Should you buy the note? Check the decision in three ways: (1) by comparing your future value if you buy the note versus leaving your money in the bank, (2) by comparing the PV of the note with your current bank account, and (3) by comparing the effective annual rate on the note versus that of the bank account.
Suppose a bank issued a 30-year loan at a fixed rate of 2.5% with monthly payments 10 years ago. However, the bank now needs to sell this loan to raise money, but interest rates have risen to 7%. While on paper, the borrower still owes $____________________, the bank can only expect to sell this loan for $____________________ assuming they have plenty of time to find an appropriate buyer. Both the bank and the buyer of the loan expect that the homeowner will hold the loan to maturity
A bank agrees to buy three-month forward €500,000 at $1.14/€ from its client and simultaneously sells three-month €500,000 at $1.16/€ to offset the position. Three months later the Euro appreciates to $1.15/€ and the client declares bankruptcy. The following is true, except A At the end of three months, the bank will incur a loss of $5,000 compared to the expected gain. B At the end of the three month, the bank will incur a gain of $5,000 compared to the expected gain. C The current transaction requires the bank In three months to purchase €500,000 in exchange for $570,000. D The current transaction requires the bank In three months to sell €500,000 in exchange for $580,000.
4. On 1/1/21 we sell equipment and accept a 3-year note receivable for $36,500. The market value is $36,500. Payments of $13,655 include both principal and interest and are to be made annually starting on 1/1/22. The present value of the payments is $36,500. The bank would require the purchaser to pay interest of 6% in order to borrow from them. The equipment cost us $90,000 and had a book value of $40,000. Note: Be sure to show the date of each journal entry. The 'right' journal entry on the 'wrong' date is wrong. a. Prepare an amortization table b. Prepare the journal entry for 1/1/21 c. Prepare the journal entry for 12/31/21 d. Prepare the journal entry for 1/1/22 Amortization table: Journal entries: Debits Credits 1/1/21 12/31/21 1/1/22
Your company seeks to take over Good Deal Company. Your company’s offer for Good Deal is $3,000,000 in cash upon signing the agreement followed by 10 annual payments of $300,000 starting one year later. The time value of money is 10%. Find the present worth of your company’s offer and perform a sensitivity analysis i.e. find how sensitive the value of the present worth is to changes in the initial cash upon signing, amount of payments, their frequency and rate of return.
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Mr Mhlaba does not have money to buy cash for the Kenwood.she decides to buy it on higher pechuse deal. The cash was.R7139.99 Special price.R6449 The higher purchase deal intails the ff 15% deposite 18.5% annual simple interest rate on the price less deposit 3years to pay Use the information above to answer the questions that follows 1.define the term.high purchase 2.calculate the discount amount that is given on the kenwood. 3.mr mhlaba paird R974.85 as a deposit on the ken wood.show how the deposit was calculated. 4.calculate the amount of payable after these years excluding the deposit that she already paid. 5.dertimene the number of months that will be after making a monthly payment.
Can you help me with this problem with step by step explanation, please?
Please do not give solution in image format ? And Fast answering please and explain proper steps by Step.
The Borstal Company has to choose between two machines that do the same job but have different lives. The two machines have the following costs: Year Machine A Machine B $42,500 10,500 10,500 10,500 + replace $52,500 9,000 9,000 9,000 9,000 + replace 4 These costs are expressed in real terms. Suppose that technological change is expected to reduce costs by 10% per year. There will be new machines in year 1 that cost 10% less to buy and operate than A and B. In year 2, there will be a second crop of new machines incorporating a further 10% reduction, and so on. Suppose you are Borstal's financial manager. If you had to buy one or the other machine and rent it to the production manager for that machine's economic life, what annual rental payment would you have to charge at the end of the first year and how would this alter in subsequent years given the expected technological changes? Assume a 9% real discount rate and ignore E taxes. (Do not round intermediate calculations. Enter your…
Company A is currently cash-constrained, and must make a decision about whether to delay paying one of its suppliers, or taking out a loan. They owe the supplier $23345, and they can borrow the money from Bank A, which has offered to lend the firm $23345 for 2 month(s) at an APR (compounded) of 15%. The bank will require a (no-interest) compensating balance of 7% of the face value of the loan and will charge a $216 loan origination fee, which means Hand-to-Mouth must borrow even more than the $23345. Compute the EAR of the loan. Give typing answer with explanation and conclusion

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