Cypress Oil Company's December 31, 2021, balance sheet listed $735,000 of notes receivable and $21,600 of interest recelvableincluded in current assets. The following notes make up the notes receivable balance:Note 1 Dated 8/31/2021, principal of $340,000 and interest at 12% due on 2/28/2022.Note 2 Dated 6/30/2021, principal of $200,000 and interest due 3/31/2022.Note 3 $20e,eee face value noninterest-bearing note dated 9/30/2021, due 3/31/2022. Note was issued in exchange for merchandise.The company records adjusting entries only at year-end. There were no other notes receivable outstanding during 2021.Required:1. Determine the rate used to discount the noninterest-bearing note.2. Determine the explicit interest rate on Note 2. (Round your intermediate calculations to the nearest whole dollar amount.)3. What is the amount of interest revenue that appears in the company's 2021 income statement related to these notes?1.Discount rate2.Interest rate3.Interest revenue

The discount rate is an interest rate charged by the central bank while lending money to commercial…

Answered: Cypress Oil Company's December 31,…

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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KKK Inc. provided the following schedule of liabilities on December 31,2021: Accounts payable P6,500,000 Bank note payable – 10% 3,000,000 Bank note payable – 11% 5,000,000 Interest payable 150,000 Mortgage note payable – 10% 2,000,000 Bonds payable 4,000,000 --- The P3,000,000, 10% was issued March 1,2021, payable on demand. Interest is payable every six months. ---The one-year P5,000,000,11% note was issued January 15,2021. On December 31,2021, KKK negotiated written agreement with the bank to replace the note with a 2-year. P5,000,000 note to be issued January 15,2022. ---The 10% mortgage note was issued October 1,2018, with a term of 10 years. Terms of the note give the holder the right to demand immediate payment if the entity fails to make a monthly…
18.Booster Company received a three-year, non-interest bearing note for P500,000 for merchandise sold on January 1, 2021. The current interest rate at that time was 15% for similar notes. Booster recorded the receipt of the note as follows:Notes Receivable 500,000 Sales 500,000What is the effect of this accounting for notes receivable on Booster Company's profit for years 2021, 2022 and 2023 and its retained earnings at the end of 2023, respectively? a. Overstate, overstate, understated, no effect b. Overstate, understate, understate, no effect c. Overstate, understate, understate, understate d. No effect on any of these
Waterway Company has the following two notes receivable at May 31, 2024, its fiscal year end: 1. 2. $32,400 six-month, 6% note issued January 1, 2024. $12,000 three-month, 4% note issued April 30, 2024. Interest is payable at maturity for both notes. (a) Calculate the accrued interest on both notes at May 31, 2024. (Round answers to the nearest whole dollar, e.g. 5,275.) Note 1: Note 2: Total accrued interest $
Catriona Company disclosed the following information on December 31, 2021: SSS payable P20,000 Notes Payable P40,000 Deferred tax liability P10,000 Notes payable due to bank, 12% interest bearing note payable yearly,issued on August 31, 2021, maturing on August 31, 2022 P1,000,000 Note: In the case of the notes payable due to bank, supposing the entity has the discretion to refinance the obligation for at least 12 months after the given maturity date (not reporting period), as seen in its loan agreement, Compute for the current liabilities as of December 31, 2021
Cypress Oil Company's December 31, 2024, balance sheet listed $645,000 of notes receivable and $16,000 of interest receivable included in current assets. The following notes make up the notes receivable balance: Note 1 Dated 8/31/2024, principal of $300,000 and interest at 10% due on 2/28/2025. Note 2 Dated 6/30/2024, principal of $150,000 and interest due 3/31/2025. Note 3 $200,000 face value noninterest-bearing note dated 9/30/2024, due 3/31/2025. Note was issued in exchange for merchandise. The company records adjusting entries only at year-end. There were no other notes receivable outstanding during 2024. Required: 1. Determine the rate used to discount the noninterest-bearing note. 2. Determine the explicit interest rate on Note 2. 3. What is the amount of interest revenue that appears in the company's 2024 income statement related to these notes? 1. Discount rate 2. Interest rate 3. Interest revenue % %
Folgers Inc. reported bond interest expense of $12,000 during 2020. The balance in Bond Interest Payable was $1,500 on 1/1/20 and $1,825 on 12/31/20. Also during 2020 $300 of Discount on Bonds Payable was amortized. What amount of cash was paid for interest during 2020?
Dineshbhai
On January 1, 2022, Vaughn Company, a calendar-year company, issued $1665000 of notes payable, of which $416250 is due on January 1 for each of the next four years. Ignoring interest, the proper balance sheet presentation on December 31, 2022, is O Current Liabilities, $416250; Long-term Debt, $1248750. O Long-term Debt, $1665000. O Current Liabilities, $832500; Long-term Debt, $832500. O Current Liabilities, $1665000.
At December 31, 2021, Sheridan Company had a five-month, 5%, $79,200 note receivable that was issued on October 1, 2021. Interest and principal are payable at maturity on March 1, 2022. Prepare the March 1, 2022, entry to record the receipt of cash at maturity for the note
An accounting example: Otter Products inc issued bonds on January 1, 2019. Interest to be paid semi-annually. Term in years is 2; Face value of bonds issued is $200,000; Issue Price $206,000; Specified Interest Rate each payment period is 6% Question. Calculate a. the amount of interest paid in cash every payment period. b. The amount of amortization to be recorded at each interest payment date (use straight-line method) c. complete amoritzation table by calculating interest expense and beginning and ending bond carrying amounts at the each period over 2 years. The term is for 2 years however 3 years is showing on the workbook. How do I calcuate the 3rd year if the problem only says the term is 2 years?
On January 1, 2022, Sunland Company issued $420,000, 12%, 10-year bonds at face value. Interest is payable annually on January 1. (a) (b) Prepare the journal entry to record the accrual of interest on December 31, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Dec. 31, 2022 Account Titles and Explanation Debit Credit
Items 28 to 30 are based on the following information. The following data were obtained from the financial records of Orphan Black Company: 15%, 10-year, Bonds Payable, dated January 1, 2019 Debit Credit Cash proceeds from issue on January 1, 2019 of 1,000, P1,000 bonds. The market rate of interest on the date of issue was 12% Bond Interest Expense Cash paid, 1/2/20 Cash paid, 7/1/20 Accrual, 12/31/20 Accrued Interest on Bonds Balance, 1/1/20 Accrual, 12/31/20 Treasury Bonds Redemption price and interest to date on 200 bonds permanently retired on December 31, 2020 a. b. 75,000 75,000 75,000 a. 75,000 b. 135,000 265,000 C. d. 1,172,044 1,172,044 75,000 75,000 Balance 28. What is the carrying value of bonds payable at December 31, 2020? 831, 110 c. 1,151,583 921,266 800,000 d. 29. What is the accrued interest on bonds at December 31, 2020? 75,000 150,000 225,000 C. 69,745 d. 160,826 75,000 150,000 265,000 60,000 52,500 30. How much is the bond interest expense for the year ended…

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