Coronado Limited owes $290,000 to Sage Hill Inc. on a 10-year, 10% note due on December 31, 2023. The note was issued at par. Because Coronado is in financial trouble, Sage Hill agrees to extend the maturity date to December 31, 2025, reduce the principal to $230,000, and reduce the interest rate to 3%, payable annually on December 31. The market rate is currently 3%. Coronado prepares financial statements in accordance with IFRS. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ORDINARY ANNUITY OF 1. Using (1) factor tables, (2) a financial calculator, or (3) Excel function PV. prepare the journal entries on Coronado's books on December 31, 2023, 2024, and 2025. (Hint: Refer to Chapter 3 for tips on calculating) (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places e.g. 58,971. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Date > Account Titles and Explanation (To record interest expense) (To record payment of note) Debit 000000 Credit
Coronado Limited owes $290,000 to Sage Hill Inc. on a 10-year, 10% note due on December 31, 2023. The note was issued at par. Because Coronado is in financial trouble, Sage Hill agrees to extend the maturity date to December 31, 2025, reduce the principal to $230,000, and reduce the interest rate to 3%, payable annually on December 31. The market rate is currently 3%. Coronado prepares financial statements in accordance with IFRS. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ORDINARY ANNUITY OF 1. Using (1) factor tables, (2) a financial calculator, or (3) Excel function PV. prepare the journal entries on Coronado's books on December 31, 2023, 2024, and 2025. (Hint: Refer to Chapter 3 for tips on calculating) (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places e.g. 58,971. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Date > Account Titles and Explanation (To record interest expense) (To record payment of note) Debit 000000 Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Coronado Limited owes $290,000 to Sage Hill Inc. on a 10-year, 10% note due on December 31, 2023. The note was issued at par.
Because Coronado is in financial trouble, Sage Hill agrees to extend the maturity date to December 31, 2025, reduce the principal to
$230,000, and reduce the interest rate to 3%, payable annually on December 31. The market rate is currently 3%. Coronado prepares
financial statements in accordance with IFRS.
Click here to view the factor table PRESENT VALUE OF 1.
Click here to view the factor table PRESENT VALUE OF AN ORDINARY ANNUITY OF 1.
Using (1) factor tables, (2) a financial calculator, or (3) Excel function PV, prepare the journal entries on Coronado's books on December
31, 2023, 2024, and 2025. (Hint: Refer to Chapter 3 for tips on calculating.) (Round present value factor calculations to 5 decimal places,
e.g. 1.25124 and final answer to O decimal places e.g. 58,971. Credit account titles are automatically indented when the amount is entered. Do
not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit
entries.)
Date
>
Account Titles and Explanation
(To record interest expense)
(To record payment of note)
Debit
Credit
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