Don't use AI Braxton Technologies, Inc., constructed a conveyor for A&G Warehousers that was completed and ready for use onJanuary 1, 2021. A&G paid for the conveyor by issuing a $100,000, four-year note that specified 6% interest to be paid onDecember 31 of each year, and the note is to be repaid at the end of four years. The conveyor was custom-built for A&G,so its cash price was unknown. By comparison with similar transactions it was determined that a reasonable interest ratewas 12%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tablesprovided.)5. By considering the installment payment of requirement 4, prepare an amortization schedule for the four-year term ofthe installment note.6. Prepare the journal entry for A&G's third installment payment on December 31, 2023.

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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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Braxton Technologies, Inc., constructed a conveyor for A&G Warehousers that was completed and ready for useon January 1, 2018. A&G paid for the conveyor by issuing a $100,000, four-year note that specified 5% interestto be paid on December 31 of each year, and the note is to be repaid at the end of four years. The conveyor wascustom-built for A&G, so its cash price was unknown. By comparison with similar transactions it was determined that a reasonable interest rate was 10%.Required:1. Prepare the journal entry for A&G’s purchase of the conveyor on January 1, 2018.2. Prepare an amortization schedule for the four-year term of the note.3. Prepare the journal entry for A&G’s third interest payment on December 31, 2020.4. If A&G’s note had been an installment note to be paid in four equal payments at the end of each year beginning December 31, 2018, what would be the amount of each installment?5. Prepare an amortization schedule for the four-year term of the…
Amber Mining and Milling, Inc., contracted with Truax Corporation to have constructed a custom-made lathe. The machine was completed and ready for use on January 1, 2021. Amber paid for the lathe by issuing a $600,000, threeyear note that specified 4% interest, payable annually on December 31 of each year. The cash market price of the lathe was unknown. It was determined by comparison with similar transactions that 12% was a reasonable rate of interest.Required:1. Prepare the journal entry on January 1, 2021, for Amber Mining and Milling’s purchase of the lathe.2. Prepare an amortization schedule for the three-year term of the note.3. Prepare the journal entries to record (a) interest for each of the three years and (b) payment of the note at maturity.
Braxton Technologies, Incorporated, constructed a conveyor for A&G Warehousers that was completed and ready for use on January 1, 2024. • A&G paid for the conveyor by Issuing a $100,000, four-year note that specified 5% Interest to be paid on December 31 of each year, and the note is to be repaid at the end of four years. • The conveyor was custom-built for A&G, so Its cash price was unknown. • By comparison with similar transactions it was determined that a reasonable Interest rate was 10%. Required: 1. Prepare the journal entry for A&G's purchase of the conveyor on January 1, 2024. 2. Prepare an amortization schedule for the four-year term of the note. 3. Prepare the journal entry for A&G's third Interest payment on December 31, 2026. 4. If A&G's note had been an installment note to be paid in four equal payments at the end of each year beginning December 31, 2024, what would be the amount of each installment? 5. By considering the installment payment of requirement 4, prepare an…
American Food Services, Inc., acquired a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2021. In payment for the $4 million machine, American Food Services issued a four-year installment note to be paid in four equal payments at the end of each year. The payments include interest at the rate of 10%.Required:1. Prepare the journal entry for American Food Services’ purchase of the machine on January 1, 2021.2. Prepare an amortization schedule for the four-year term of the installment note.3. Prepare the journal entry for the first installment payment on December 31, 2021.4. Prepare the journal entry for the third installment payment on December 31, 2023.
ok nces Braxton Technologies, Incorporated, constructed a conveyor for A&G Warehousers that was completed and ready for use on January 1, 2024. • A&G paid for the conveyor by Issuing a $150,000, four-year note that specified 8% Interest to be paid on December 31 of each year, and the note is to be repald at the end of four years. • The conveyor was custom-bullt for A&G, so Its cash price was unknown. By comparison with similar transactions It was determined that a reasonable Interest rate was 12%. . Required: 1. Prepare the Journal entry for A&G's purchase of the conveyor on January 1, 2024. 2. Prepare an amortization schedule for the four-year term of the note 3. Prepare the Journal entry for A&G's third Interest payment on December 31, 2026. 4. If A&G's note had been an installment note to be paid in four equal payments at the end of each year beginning December 31, 2024, what would be the amount of each Installment? 5. By considering the installment payment of requirement 4, prepare…
Amber Mining and Milling, Inc., contracted with Truax Corporation to have constructed a custom-made lathe. The machine was completed and ready for use on January 1, 2021. Amber paid for the lathe by issuing a $600,000, three-year note that specified 4% interest, payable annually on December 31 of each year. The cash market price of the lathe was unknown. It was determined by comparison with similar transactions that 12% was a reasonable rate of interest. (FV of $1, PV of $1. FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1-a. Complete the table below to determine the price of the equipment. 1-b. Prepare the journal entry on January 1, 2021, for Amber Mining and Milling's purchase of the lathe. 3 2. Prepare an amortization schedule for the three-year term of the note. 3. Prepare the journal entries to record (a) interest for each of the three years and (b) payment of the note at maturity. Complete this question by…
On July 31, 2025, Oriole Company engaged Minsk Tooling Company to construct a special-purpose piece of factory machinery. Construction began immediately and was completed on November 1, 2025. To help finance construction, on July 31 Oriole issued a $326,400, 3-year, 12% note payable at Netherlands National Bank, on which interest is payable each July 31. $217,400 of the proceeds of the note was paid to Minsk on July 31. The remainder of the proceeds was temporarily invested in short-term marketable securities (trading securities) at 10% until November 1. On November 1, Oriole made a final $109,000 payment to Minsk. Other than the note to Netherlands, Oriole's only outstanding liability at December 31, 2025, is a $31,400, 8 %, 6-year note payable, dated January 1, 2022, on which interest is payable each December 31. (a) Calculate weighted average accumulated expenditures, avoidable interest, and total interest cost to be capitalized during 2025. Weighted-average accumulated expenditures…
American Food Services, Inc., acquired a packaging machine from Barton and Barton Corporation. Barton andBarton completed construction of the machine on January 1, 2018. In payment for the $4 million machine, American Food Services issued a four-year installment note to be paid in four equal payments at the end of each year.The payments include interest at the rate of 10%.Required:1. Prepare the journal entry for American Food Services’ purchase of the machine on January 1, 2018.2. Prepare an amortization schedule for the four-year term of the installment note.3. Prepare the journal entry for the first installment payment on December 31, 2018.4. Prepare the journal entry for the third installment payment on December 31, 2020
Holly Springs, Inc. contracted with Coldwater Corporation to have constructed a custom-made lathe. The machine was completed and ready for use on January 1, 2021. Holly Springs paid for the lathe by issuing a $300,000 note due in three years. Interest, specified at 2%, was payable annually on December 31 of each year. The cash market price of the lathe was unknown. It was determined by comparison with similar transactions for which 6% was a reasonable rate of interest. Holly Springs uses the effective interest method of amortization. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1). (Use appropriate factor(s) from the tables provided.) Required:1. Prepare the journal entry on January 1, 2021, for Holly Springs’ purchase of the lathe.2. Prepare an amortization schedule for the three-year term of the note.3. Prepare the journal entries to record (a) interest for each of the three years and (b) payment of the note at maturity.
Blossom Limited purchased a machine on account on April 1, 2021, at an invoice price of $365,470. On April 2, it paid $2,170 for delivery of the machine. A one-year, $4,120 insurance policy on the machine was purchased on April 5. On April 19, Blossom paid $7,580 for installation and testing of the machine. The machine was ready for use on April 30. Blossom estimates the machine's useful life will be five years or 6,118 units with a residual value of $87,910. Assume the machine produces the following numbers of units each year: 893 units in 2021; 1,448 units in 2022; 1,426 units in 2023; 1,222 units in 2024; and 1,129 units in 2025. Blossom has a December 31 year end. (a) Your Answer Correct Answer Your answer is correct. Determine the cost of the machine. acer
American Food Services, Inc., acquired a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2021. In payment for the $4.8 million machine, American Food Services issued a four-year installment note to be paid in four equal payments at the end of each year. The payments include interest at the rate of 12%. (FV of $1, PV of $1, FVA of $1, PVA of $1. FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare the journal entry for American Food Services' purchase of the machine on January 1, 2021. 2. Prepare an amortization schedule for the four-year term of the installment note. 3. Prepare the journal entry for the first installment payment on December 31, 2021. 4. Prepare the journal entry for the third installment payment on December 31, 2023. Complete this question by entering your answers in the tabs below. Req 2 Reg 13 and 4 Prepare an amortization schedule for the…
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