At the beginning of the year, Lambert Motors issued the three notes described below. Interest is paid at year-end. (FV of $1, PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) 1 The company issued a two-year, 12%, $690,000 note in exchange for a tract of land. The current market rate of interest is 12%. 2. Lambert acquired some office equipment with a fair value of $136,286 by issuing a one-year, $144,000 note. The stated interest on the note is 6%. The current market rate of interest is 12%. 3. The company purchased a building by issuing a three-year installment note. The note is to be repaid in equal installments of $1 million per year beginning one year hence. The current market rate of interest is 12%. Required: Prepare the journal entries to record each of the three transactions and the interest expense at the end of the first year for each. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in whole dollars.) View transaction list

At the beginning of the year, Lambert Motors issued the three notes described below. Interest is paid at year-end. (FV of $1, PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) 1 The company issued a two-year, 12%, $690,000 note in exchange for a tract of land. The current market rate of interest is 12%. 2. Lambert acquired some office equipment with a fair value of $136,286 by issuing a one-year, $144,000 note. The stated interest on the note is 6%. The current market rate of interest is 12%. 3. The company purchased a building by issuing a three-year installment note. The note is to be repaid in equal installments of $1 million per year beginning one year hence. The current market rate of interest is 12%. Required: Prepare the journal entries to record each of the three transactions and the interest expense at the end of the first year for each. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in whole dollars.) View transaction list

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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At the beginning of the year, Lambert Motors issued the three notes described below. Interest is paid at year-end. 1. The company issued a two-year, 12%, $600,000 note in exchange for a tract of land. The current market rate of interest is 12%. 2. Lambert acquired some office equipment with a fair value of $94,643 by issuing a one-year, $100,000 note. The stated interest on the note is 6%. 3. The company purchased a building by issuing a three-year installment note. The note is to be repaid in equal installments of $1 million per year beginning one year hence. The current market rate of interest is 12%. Required: Prepare the journal entries to record each of the three transactions and the interest expense at the end of the first year for each.
On January 1, 20x1, an entity issued a noninterest-bearing note of P1,200,000 in exchange for land. The note is due in three equal annual installments every December 31. The effective interest rate is 17%. Requirements Provide all the entries during the term of the note. Compute for the current and non current portions of the note on December 31, 20x1 and the amount of “Discount on notes payable” allocated to each portion.
On January 1, year 8 Harper Co. finances the purchase of equipment by issuing a $15,000 non-interest-bearing note payable. The note will be paid off in 10 equal annual installments beginning on December 31, year 8. The market rate of interest for notes of this type is 5%. Considering the information below, at what amount should Harper Co. report the equipment on its balance sheet dated December 31, year 8? The present value of $1 at 5% for 10 periods 0.61391 The present value of an ordinary annuity of $1 at 5% for 10 periods 7.72173 The present value of an annuity due of $1 at 5% for 10 periods is 8.10782 8.10782
On January 1, Year 1, Beatie Company borrowed $400,000 cash from Central Bank by issuing a five-year, 5 percent note. The principal and interest are to be paid by making annual payments in the amount of $92,390. Payments are to be made December 31 of each year, beginning December 31, Year 1. Required Prepare an amortization schedule for the interest and principal payments for the five-year period. (Round your answers to the nearest dollar amount.) BEATIE COMPANY Amortization Schedule $400,000, 5-Year Term Note, 5% Interest Rate Principal Balance Principal Balance End of Period Cash Payments Applied to Interest Applied to Principal Year December 31 on January 1 Year 1 Year 2 Year 3 Year 4 Year 5
On January 1, year 8 Harper Company finances the purchase of equipment by issuing a $15,000 non-interest-bearing note payable. The note will be paid off in 10 equal annual installments beginning on December 31, year 8. The market rate of interest for notes of this type is 5%. Considering the information below, at what amount should Harper Company report the equipment on its balance sheet dated December 31, year 8? The present value of $1 at 5% for 10 periods 0.61391 The present value of an ordinary annuity of $1 at 5% for 10 periods 7.72173 The present value of an annuity due of $1 at 5% for 10 periods is 8.10782 8.10782 Multiple Choice $9,209 $11,583 $12,162 $15,000
On January 1, Year 1, a company purchased land costing $800,000. Instead of paying cash at the time of purchase, the company plans to make four installment payments of $215,221.64 on June 30 and December 31 in Year 1 and Year 2. The payments include interest at a rate of 6%. Required: 1. Record the purchase of land when the note is issued. 2. Record the first installment payment on June 30, Year 1, and the second installment payment on December 31, Year 1. 3. Calculate the balance of Notes Payable and Interest Expense on December 31, Year 1.
On January 1st, year one, zero company obtained a 52,000, for year, 6.5% installment note from regional bank. The note requires annual payments of $15,179, beginning on December 31st, year one. The December 31st, Year too carrying amount in the amortization table for this installment and it will be equal to
On September 1, Year 1, Able Company purchased a building from Regal Corporation by paying $ 380,000 cash and issuing a one- year note payable for the balance of the purchase price. Interest on the note is stated at an annual rate of 12% and is paid at maturity. In its December 31, Year 1, balance sheet, Able correctly presented the note and interest payable as follows: Interest payable $15, 200 Notes payable, 12%, due September 1, Year 2 $380,000 What is the amount of the interest expense Able will recognize on this note in Year 2? Multiple Choice $15,200 $26, 600 $ 30,400 $45,600
Amenadiel Co. has an 8% note receivable dated June 30, year 1, in the original amount of 150,000. Payments of 50,000 in principal plus accrued interest are due annually on July 1, year 2, year 3, and year 4. In its June 30, year 2 balance sheet, what amount should Amenadiel Co. report as a current asset for interest on the note receivable? *
Cool Globe Inc. entered into two transactions, as follows: 1. Purchased equipment paying $20,000 at the date of purchase and signing a noninterest-bearing note requiring the balance to be paid in four annual installments of $20,000 on the anniversary date of the contract. Based on Cool Globe's 12% borrowing rate for such transactions, the implicit interest cost is $19,253. 2. Purchased a tract of land in exchange for $10,000 cash that was paid immediately and signed a noninterest-bearing note requiring five $10,000 annual payments. The first annual payment of the note is due in one year. The fair value of the land is $46,000. Required: Prepare the journal entries for these transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 2. Record the noninterest bearing note payable for the purchase of equipment for which $20,000 paid as down payment and balance to be paid in…
On July 1 of the current year, an entity obtained a two-year 8% note receivable for services rendered. At that time, the market rate of interest was 10%. The face amount of the note and the entire amount of interest are due on the date of maturity. Interest receivable on December 31 of the current year is a. 5% of the face amount of the note’ b. 4% of the face amount of the note c. 5% of the present value of the note d. 4% of the present value of the note
Clayton Company borrowed $7, 300 from the State Bank on April 1, Year 1. The one-year note carried a 19% rate of interest. The amount of interest expense that Clayton would report in Year 1 and Year 2, respectively would be: Multiple Choice $1, 387 and $o. $1,040 and So. So and $1,387. $1,040 and $347.