On May 1, 2020, HELLO Company purchased five delivery trucks for P 10,000,000 from HI Company. HELLO Company gave HI Company 1 year 12%interest bearing note (stated interest/nominal interest rate is 12%) payable on May 1, 2021. At the date of purchase, the interest rate for this type of purchase is 18%. Round your present value factors to four decimal places. Show solutions. Box your final answers for Number 2 questions. Prepare an amortization table.Required:Give the journal entries on May 1, 2020, December 31, 2020 and May 1, 2021.Answer the following:What is the value of the Delivery Truck that shall be reflected in the statement of financial position on May 1, 2020? ______________________What is the amount of Notes Payable that shall be reflected in the statement of financial position on May 1, 2020?______________What is the amount of Notes Payable that shall be reflected in the statement of financial position on December 31, 2020?______________What is the interest expense that shall be reported in the statement of financial performance on December 31, 2020?____________________

Working notes:- Cost of 5 trucks payable…

Answered: Give the journal entries on May 1,…

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

On May 1, 2020, HELLO Company purchased five delivery trucks for P 10,000,000 from HI Company. HELLO Company gave HI Company 1 year 12%interest bearing note (stated interest/nominal interest rate is 12%) payable on May 1, 2021. At the date of purchase, the interest rate for this type of purchase is 18%. Round your present value factors to four decimal places. Show solutions. Box your final answers for Number 2 questions. Prepare an amortization table.

Required:

Give the journal entries on May 1, 2020, December 31, 2020 and May 1, 2021.
Answer the following:
What is the value of the Delivery Truck that shall be reflected in the statement of financial position on May 1, 2020? ______________________
What is the amount of Notes Payable that shall be reflected in the statement of financial position on May 1, 2020?______________
What is the amount of Notes Payable that shall be reflected in the statement of financial position on December 31, 2020?______________
What is the interest expense that shall be reported in the statement of financial performance on December 31, 2020?____________________

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