Begin Again Company sold an equipment with carrying amount of P2,000,000and received a noninterest-bearing note requiring payment of P500,000annually for 10 years. The first payment is due December 31, 2021.The prevailing rate of interest for this type of note at date of issuance is 12%.PV of 1 at 12% for 10 periods: 0.322PV of ordinary annuity of 1 at 12% for 10 periods: 5.650On December 31, 2020, what is the carrying amount of the note receivable?5,000,0002,175,0001,610,0002,825,000What is the gain on sale of equipment to be recognized in 2020?3,000,0002,175,000825,000

Carrying amount of the note receivable on December 31, 2020 = Present value of the note where,…

Answered: Begin Again Company sold an equipment…

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 January 1, 2020, South Company purchased five delivery trucks for P 10,000,000 from West Company.South Company gave West Company 1 year non-interest bearing note (stated interest/nominal interest rate is 0) payable on January 1, 2021. At the date of purchase, the interest rate for this type of purchase is 13%. Round present value factors to four decimal places. Prepare an amortization table. Required: 1. What is the amount of Notes Payable that shall be reflected in the statement of financial position on December 31, 2020?______________ 2. What is the interest expense that shall be reported in the statement of financial performance on December 31, 2020?____________________
On December 31, 2021, Ainsley Company finished consultation services and accepted exchange a zero interest bearing of $ 995,000 and a due date of December 31, 2024. The implied interest rate is 12%. The following interest factors are provided Table Factors For Three Periods Future Value of 1 Present Value of 1 Future Value of Ordinary Annuity of 1 Present Value of Ordinary Annuity of 1 Interest Rate 6% 12% 1.19102 1.40493 0.83962 0.71178 3.18360 3.37440 2.67301 2.40183 Instructions (a) Determine the present value of the note. (b) Prepare the journal entries for the initial transaction , recognition of Interest each year, and the colle Instructions: Compute both a must show your work
On Dec 30, 2020 Fox purchased a machine from Grisley Corp in exchange for a zero-interest bearing note requiring eight payments. A down payment was made on Dec 30, 2020 and the note's rents are due annually beg 12/30/2021 Note: the down payment IS the first payment of the notes rents At date of issuance the prevailing rate of interest for this type of note was 11% Present value factor are as follows: If the note balance to Grisley Corp net of the down payment is $376,960 on 12/30/2020 then what is the value of each payment? My answer is $47,120 is that correct thank you Brenda
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On December 30, Year 1, ABC Corporation sold a machine to DEF Corporation in exchange for a non-interest bearing note requiring ten annual payments of P10,000. DEF made the first payment on December 30, Year 1. The market interest rate for similar notes at date of issuance was 8%. Information on present value factors is as follows: For 9 periods, the present value of P1 at 8% is 0.50 while the present value of ordinary annuity of P1 at 8% is 6.25. Meanwhile, for 10 periods, the present value of P1 at 8% is 0.46 and the present value of ordinary annuity of P1 at 8% is 6.71. In its December 31, Year 1 balance sheet, what amount should ABC Corporation report as note receivable? *
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3. On April 1, 2021, XYZ CO. issued a 9% interest bearing note with a face amount of P 30,000,000 for the purchase of a machine. The note is payable in five equal annual installments starting on March 31,2022. Interest is payable annually base on the remaining balance. There is no established cash price for the equipment. The prevailing market rate of interest for a note of this type is 12%. How much should be presented as part of non-current liabilities in related to the notes as of December 31,2022 in the statement of financial position?

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