b. Forgave the accrued interest for one year amounting to P12,000.Case 5Brewed entered into two restructuring agreement in 2021, Brewed iscurrently experiencing financial difficulties. The details of the restructuringof its note payable are as follows:Note payable- Café CompanyOn December 31, 2021, Brewed Company entered into a debt restructunngagreement with Café Company. A note for P100,000 and one yeaaccrued interest was due on this date to Café Company. The termisrestructuring are as follows:a. Reduced the principal obligation to P70,000.b. Forgave the accrued interest for one year amounting to P12,00.c. Extend the maturity date to December 31, 2024. Note payable - Affogato CompanyOn December 31, 2021, Brewed Company entered into a debt restructuringd. Reduced the interest rate to 8%.Chapter 3: Audit of Non-Current Liabilitiesagreement with Affogato Company. A note for P200,000 due on this datee. Interest based on the new terms is payable every December 31,I Reduced the interest rate to 8%starting 2022.-aAffogato Company. Interest for current year was paid by Brewed. Theterms of restructuring are as follows:Reduced the principal obligation to P180,000.h Extend the maturity date to December 31, 2023.e Reduced the interest rate from 10% to 9.5%.d. Interest is payable at each year-end starting 2022.Determine the following as a result of your audit:1. How much is the amount of gain (loss) on extinguishment shouldBrewed recognized in 2021?2. How much is the interest expense recognized in the statement ofcomprehensive income for the period ending December 31, 2022?3. How much is the total carrying value of the notes payable reported inits December 31, 2022 statement of financial position?

Restructuring agreement: It is an agreement entered into by the borrowers and the lenders, for…

b. Forgave the accrued interest for one year amounting to P12,000. Case 5 Brewed entered into two restructuring agreement in 2021, Brewed is currently experiencing financial difficulties. The details of the restructuring of its note payable are as follows: Note payable- Café Company On December 31, 2021, Brewed Company entered into a debt restructunng agreement with Café Company. A note for P100,000 and one year accrued interest was due on this date to restructuring are as follows: a. Reduced the principal obligation to P70,000. b. Forgave the accrued interest for one year amounting to P12.00. c. Extend the maturity date to December 31, 2024. Café Company. The terms of

b. Forgave the accrued interest for one year amounting to P12,000. Case 5 Brewed entered into two restructuring agreement in 2021, Brewed is currently experiencing financial difficulties. The details of the restructuring of its note payable are as follows: Note payable- Café Company On December 31, 2021, Brewed Company entered into a debt restructunng agreement with Café Company. A note for P100,000 and one year accrued interest was due on this date to restructuring are as follows: a. Reduced the principal obligation to P70,000. b. Forgave the accrued interest for one year amounting to P12.00. c. Extend the maturity date to December 31, 2024. Café Company. The terms of

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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On December 31 , 2018 Nicholas Co. is in financial difficulty and cannot pay a note due that day . It is a $3,300,000 8% issued at par note, payable to Key Bank. Key Bank agrees to accept from Nicholas equipment that has a fair value of 1,450,000, originally costing $2,400,000, with accumulated depreciation of $1,250,000. Key Bank also extends the maturity date to December 31, 2021, reduces the face amount of the note to $1,250,000, and reduces the interest rate to 6%, with interest payable at the end of each year. a. Nicholas should recognize a gain or loss on the transfer of the equipment of: b. At the end of each of the next three years Nicholas records the $ 75,000 interest paid to Key Bank as a: c. In determining the carrying value of the note at December 31, 2018 Key Bank uses an effective interest rate equal to: d. Key Bank records a loss on restructuring of: e. In recording the loss on restructuring, Key bank:
ABC Company, due to extreme financial difficulties has negotiated a restructuring of its 10%, P10,000,000 note payable due on December 31, 2021. The unpaid interest on the note on such date is P1,000,000. The creditor has agreed to reduce the face value to P8,000,000, forgive the unpaid interest, reduce interest rate to 8% and extend the due date three years from December 31, 2021. The present value of 1 at 10% for three periods is 0.75 and present value of an ordinary annuity of 1 at 10% for three periods is 2.49. What is the gain on extinguishment of debt to be recognized by ABC Company on December 21, 2021?
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what is notes recievable for On December 31;2025, Blue Inc. rendered services to Beghun Corporation at an agreed price of $106,641, accepting $41,800 down and agreeing to accept the balance in four equal installments of $20,900 receivable each December 31 . An assumed interest rate of 11% is imputed. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Example 4 (Notes Receivable): On November 30, 2020, James Co. lent money to Scott Co. and issued a 5-month, $120,000, 8% note receivable. Scott paid James the full amount of interest and principal on April 30, 2021. What is the journal entry for James Co. to record the issuance of the note receivable? What is the end-of-year adjusting journal entry for James Co. to record interest revenue earned as of December 31?
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[The following information applies to the questions displayed below.] Agrico Inc. accepted a 10-month, 12.8% (annual rate), $9,000 note from one of its customers on May 15, 2019; interest is payable with the principal at maturity. b-1. Prepare the horizontal model to record collection of the note and interest at maturity. (Use amounts with + for increases and amounts with – for decreases.) Please don't provide solution image based thanku
Rothschild Chair Company, Incorporated, was indebted to First Lincoln Bank under a $20 million, 10% unsecured note. The note was signed January 1, 2014, and was due December 31, 2027. Annual interest was last paid on December 31, 2022. At January 1, 2024, Rothschild Chair Company was experiencing severe financial difficulties and negotiated a restructuring of the terms of the debt agreement. Note: Use appropriate factor(s) from the tables provided. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: Prepare all journal entries by First Lincoln Bank to record the restructuring and any remaining transactions, for current and future years, relating to the debt under each of the independent circumstances below: 1. First Lincoln Bank agreed to settle the debt in exchange for land having a fair value of $16 million but carried on Rothschild Chair Company's books at $13 million. 2. First Lincoln Bank agreed to (a) forgive the interest accrued from last year, (b)…
Problem 2 Bella Company had an overdue 8% note payable to Marimar Bank at Php8,000,000 with acrrued interest of Php640,000. As a result of a settlement on January 1, 2020. Marimar Bank agreed to the following restructuring arrangement: - Reduced the principal obligation to Php7,000,000 - Forgave the Php640,000 accrued interest - Extended the maturity date to December 31, 2021 - Annual interest of 10% is to be paid on Dec. 31, 2020 and 2021 The present value of 1 at 8% for two periods is 0.8573, and the present value of an ordinary annuity of 1 for two periods is 1.7833 Required: - Prepare journal entries for 2020 and 2021 to record the modification of terms
The prevailing market interest rate for similar instrument at the time of restructuring (December 31, 2019) is 12%. What is the impairment loss to be recognize din December 31, 2019? (Use four decimal places for the PV factor)
Rothschild Chair Company, Incorporated, was indebted to First Lincoln Bank under a $40 million, 10% unsecured note. The note was signed January 1, 2014, and was due December 31, 2027. Annual interest was last paid on December 31, 2022. At January 1, 2024. Rothschild Chair Company was experiencing severe financial difficulties and negotiated a restructuring of the terms of the debt agreement Note: Use appropriate factor(s) from the tables provided. (FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) Required: Prepare all journal entries by First Lincoln Bank to record the restructuring and any remaining transactions, for current and future years, relating to the debt under each of the independent circumstances below: 1. First Lincoln Bank agreed to settle the debt in exchange for land having a fair value of $36 million but carried on Rothschild Chair Company's books at $33 million. 2. First Lincoln Bank agreed to (a) forgive the interest accrued from last year, (b)…
Blue Cells Can contain On December 31, 2017, Short Co. is in financial difficulty and cannot pay a note due that day. It is a $2,000,000 face value note with $200,000 accrued interest payable to Bryan, Inc. The original market rate of interest on the note was 12.58613%. Bryan agrees to forgive the accrued interest, extend the maturity date (two years) to December 31, 2019, and reduce the interest rate to 4%. The present value of the restructured cash flows is $1,712,000 (using the original market rate). Do NOT add rows to the spreadsheet! Discount Cash Premium Interest payable Par Interest expense Discount on bond payable Yes Bonds payable No Loss on redemption Gain on redemptin Cash Interest payable Interest receivable Notes payable Gain on restructuring Loss on restructuring Discount on Note payable Premium on Note payable…