Hello tutor give answer Garrett Company purchased land by paying $28,000cash and finance the rest of the purchase price with aninstallment loan from a bank. Garrett agreed to pay thebank $28,000 for each of the next eight years beginningone year from the purchase date. The interest rate onthe loan is 8%.The cost of the land recorded by Garrett on thepurchase date is

Step 1: Define Cost of AssetsBased on the type of asset and its condition, the cost of an asset…

Answered: Garrett Company purchased land by…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 1EA: Halep Inc. borrowed $30,000 from Davis Bank and signed a 4-year note payable stating the interest...

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the cost of the land recorded by garrett on the purchase date is
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Short Company purchased land by paying $11,000 cash on the purchase date and agreed to pay $11,000 for each of the next six years beginning one-year from the purchase date. Short's incremental borrowing rate is 7%. The land reported on the balance sheet is closest to: (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided.) Multiple Cholce $77,000. $63.432. $66,000. $43,979.
Southtown Corporation purchased equipment and in exchange signed a two-year promissory note.The note requires Southtown to make a single payment of $100,000 in two years. Southtown hasother promissory notes that charge interest at the annual rate of 6 percent.Required:1. Compute the present value of the note, rounded to the nearest dollar, using Southtown’s typical interest rate of 6 percent.2. Show the journal entry to record the equipment purchase (round to the nearest dollar).3. Show the adjusting journal entry at the end of the first year to record interest on the note.
Acme purchases a new delivery truck making a cash payment of $10,000, a $12,000 trade-in on the old delivery truck and enters into a 5-year loan for the balance, requiring yearly payments of $6,000 each. The interest rate on the loan is 4% and the first payment is due at date of sale. What amount should Acme capitalize for the purchase of the delivery truck?
Land is purchased for $75,000. It is agreed for the land to be paid for over a 5-year period with annual payments and using a 12% annual compound interest rate. Each payment is to be $3,000 more than the previous payment. Determine the size of the last payment.
A company purchases machinery for kshs 800,000 by making a down payment of Shs 150,000 and the remainder to be paid in equal instalments of kshs 150,000 for six years. Calculate the effective rate of interest
Cool Globe Inc. entered into two transactions, as follows: Purchased equipment paying $20,000 at the date of purchase and signing a noninterest-bearing note requiring the balance to be paid in four annual installments of $20,000 on the anniversary date of the contract. Based on Cool Globe's 12% borrowing rate for such transactions, the implicit interest cost is $19,253. Purchased a tract of land in exchange for $10,000 cash that was paid immediately and signed a noninterest-bearing note requiring five $10,000 annual payments. The first annual payment of the note is due in one year. The fair value of the land is $46,000. Required:Prepare the journal entries for these transactions.
On November 1, 2022, Nelson Corp. purchased land and a building for a combined cost of $2,000,000. Nelson paid $500,000 in cash and financed the remaining $1,500,000 by issuing a three (3) year, 9% installment note. The note will be paid back in three equal payments beginning on November 1, 2023. The Company has determined that the land and building have fair market values of $440,000 and $1,760,000, respectively. Their combined fair market value is $2,200,000. Part A: Prepare the journal entry Nelson should make to record the acquisition of these two assets. Part B: Calculate the amount of each installment payment on the note and complete the amortization below. Round the installment payment amount to the nearest whole dollar. Date Cash Paid Interest Expense Reduction in CV Carrying Value (CV) 11/1/22 11/1/23 11/1/24 11/1/25 Total
Stellar Corporation purchased equipment and in exchange signed a two-year promissory note. Thenote requires Stellar to make a single payment of $100,000 in two years. Stellar has other promissory notes that charge interest at the annual rate of 5 percent.Required:1. Compute the present value of the note, rounded to the nearest dollar, using Stellar’s typicalinterest rate of 5 percent.2. Show the journal entry to record the equipment purchase (round to the nearest dollar).
On July 1, 2023, Shamrock Inc. made two sales:1It sold excess land in exchange for a four-year, non-interest-bearing promissory note in the face amount of $1,079,350. Theland's carrying value is $540,000.2.It rendered services in exchange for an eight-year promissory note having a face value of $360,000. Interest at a rate of 3%is payable annually.The customers in the above transactions have credit ratings that require them to borrow money at 11% interest.Shamrock recently had to pay 8% interest for money it borrowed from British Bank.On July 1, 2023, Shamrock also agreed to accept an installment note from one of its customers in partial settlement ofaccounts receivable that were overdue. The note calls for four equal payments of $21,600, including the principal andinterest due, on the anniversary of the note. The implied interest rate on this note is 10%.The tables in this problem are to be used as a reference for this problem. Prepare the journal entries to record the three notes…
On July 1, 2023, Shamrock Inc. made two sales:It sold excess land in exchange for a four-year, non-interest-bearing promissory note in the face amount of $1,079,350. Theland's carrying value is $540,000.2.It rendered services in exchange for an eight-year promissory note having a face value of $360,000. Interest at a rate of 3%is payable annually.The customers in the above transactions have credit ratings that require them to borrow money at 11% interest.Shamrock recently had to pay 8% interest for money it borrowed from British Bank.3.On July 1, 2023, Shamrock also agreed to accept an installment note from one of its customers in partial settlement ofaccounts receivable that were overdue. The note calls for four equal payments of $21,600, including the principal andinterest due, on the anniversary of the note. The implied interest rate on this note is 10%.The tables in this problem are to be used as a reference for this problem.

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