Provide answer the question don't use ai For Scenario #1, Determine the carrying value of the note as of December31, 2016.1. On January 1, 2015, ABC rendered services to Z Corp. in exchange for a$105,000, 3 year note. The terms of the agreement require Z Corp. to makesemi-annual installment payments of P&I with the first installment dueimmediately. An annual interest rate of 8% is imputed. Each payment is tobe received on Jan 1 and July 1. ABC s year-end is Dec 31.2. On January 1, 2015 ABC rendered services in exchange for a $20,000 cashdown payment (this down payment is NOT a PVAD; it is simply made toreduce the amount being financed) and a 3 year $90,000, 6% note. Interestis to be remitted each June 30 and Dec 31. Principal will be remitted atmaturity. This customer has a credit rating which requires that money beborrowed at 10%.

Step 1: Carrying Value Determination ComponentsCarrying value determination components can be…

Answered: For Scenario #1, Determine the carrying…

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter14: Long-term Liabilities: Bonds And Notes

Section: Chapter Questions

Problem 11E

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Chemical Enterprises issues a note in the amount of $156,000 to a customer on January 1, 2018. Terms of the note show a maturity date of 36 months, and an annual interest rate of 8%. What is the accumulated interest entry if 9 months have passed since note establishment?
On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10% interest rate. Each annual payment is in the amount of $39,569 and payment is due each Dec. 31. What is the journal entry on Jan. 1 to record the cash received and on Dec. 31 to record the annual payment? (You will need to prepare the first row in the amortization table to determine the amounts.)
On January 1, 2019, Park Company accepted a 36,000, non-interest-bearing, 3-year note from a major customer in exchange for used equipment. The equipment had originally cost Park 200,000 and had a book value of 20,000 on the date of the sale. At the 12% imputed interest rate for this type of loan, the present value of the note is 25,500 on January 1, 2019. Park uses the effective interest rate. What is the carrying value of the note receivable on Parks December 31, 2019, balance sheet? a. 28,560 b. 29,000 c. 32,500 d. 36,000
What is the correct answer to letter b? Provide the answer with solution.
On December 31, 2021, Party Company received two P 50,000 notes receivable from customers in exchange for services rendered. On both notes, interest is computed on the outstanding principal balance at the annual rate of 3% and payable at maturity. The note from Pretty Corporation made under customary trade terms, is due in nine months, and the note from Charm, Inc. is due in five years. The market interest rate for similar notes on December 31, 2021 was 8%. The compound interest factors to convert future value into present values at 8% follow: Present value of P 1 due in nine months - 0.944 Present value of P 1 due in five years - 0.680 QUESTION: At what amounts should these two notes receivable be reported in Party's December 31, 2021 statement of financial position? Group of answer choices Pretty - P 48,260; Charm - P 39,100 Pretty - P 50,000; Charm - P 39,100 Pretty - P 50,000; Charm…
On January 1, 2021, Glanville Company sold goods to Otter Corporation. Otter signed an installment note requiring payment of $21,500 annually for five years. The first payment was made on January 1, 2021. The prevailing rate of interest for this type of note at date of issuance was 10%. Glanville should record sales revenue in January 2021 of: (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.) Multiple Choice $107,500 $81,502 $89,652 None of these answer choices are correct.
On 1 January 2022, Rodney Inc. provided services to Smith Co. in exchange for Smith’s $300,000, 2-year 8% note with interest compounded semi-annually on July 1 and January 1. The current market rate of similar notes is 12%. Rodney Inc. financial year ends December 31. REQUIRED: 1. Provide the following input values from your financial calculator: N = I/Y = PMT = FV = 2. The note was issued at = 3. The present value of the note is =
On January 1, 2021, Diggs Co. lends some money in exchange for a 10% $100,000 10-year note. The market rate for similar notes is 8%. Interest is received semiannually each July 1 and January 1. The financial year ends December 31. Round to the nearest whole number. (Hint: Prepare a partial amortization schedule to July 1, 2023) a. The note is issued at ___________(par / premium / discount) b. The present value of the note is $______________ c. The cash received at July 1, 2021 is $__________________ d. The interest income to Diggs Co. at December 31, 2022 is $_________________ e. The carrying amount of the note at July 1, 2023 is $__________________
On July 1, 2021, ABC Co. borrowed P1,000,000 and issued a one-year note payable. The lenderdiscounted the note at 12%.Prepare all the necessary journal entries under the following scenarios:a. The note is due on lump sum on June 30, 2022. The effect of discounting is immaterial.b. The note is due in equal quarterly installments starting September 20, 2021
On January 1, 2015, Oxford Company finished consultation services and accepted in exchange a promissory note with a face value of $600,000 and a due date of December 31, 2017. The stated rate of interest is 5% with interest receivable at the end of each year through 12/31/17. Assume an effective interest rate of 10% is implicit in the agreed-upon price. The effective amortization method is used. Oxford's journal entry on 1/1/15 to record service revenue will include: Select one: O a. A credit to Notes Receivable for $600,000 Ob. A credit to Service Revenue for $600,000 OC A debit to Discount on Notes Receivable for $74,602 Od. A credit to Service Revenue for $525,398 O e A credit to Discount on Notes Receivable for $52,145
On September 30, 2022 World Company borrowed P1, 000, 000 on a 9% note payable. The entity paid the first of four quarterly payments of P264, 200 when due on December 31, 2022. 1. What amount should be reported as interest expense for 2022? A. 90, 000 В. 22,500 C. 67,500 D. 30,000 2. On December 31, 2022, what is the carrying amount of the note payable? A. 758, 300 В. 750, 000 С. 825, 800 D. 735, 800
On September 1, 2020, Pot Co. issued a note payable to National Bank in the amount of P1,800,000, bearing interest at12%, and payable in three equal annual principal payments of P600,000. On this date, the bank's prime rate was 11%. Thefirst payment for interest and principal was made on September 1, 2021. At December 31, 2021, Pot should record accruedinterest payable ofa. P72,000 c. P48,000b. P66,000 d. P44,000

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