Hogg Company purchased a machine from Chump Corporation on October 31, 2020. In payment for the $570,000 purchase, Hogg issued a one-year installment note to be paid in equal monthly payments of $50,664 at the end of each month. The payments include interest at the rate of 12%. The amount of interest expense that Hogg will report in its income statement for the year ended December 31, 2020, is: $10,950 $5,064 $5,700

Hogg Company purchased a machine from Chump Corporation on October 31, 2020. In payment for the $570,000 purchase, Hogg issued a one-year installment note to be paid in equal monthly payments of $50,664 at the end of each month. The payments include interest at the rate of 12%. The amount of interest expense that Hogg will report in its income statement for the year ended December 31, 2020, is: $10,950 $5,064 $5,700

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Concord Corporation purchased a computer on December 31, 2024, for $115,500, paying $33,000 down and agreeing to pay the balance in five equal installments of $16,500 payable each December 31 beginning in 2025. An assumed interest rate of 10% is implicit in the purchase price. Prepare the journal entry at December 31, 2025, to record the payment and interest (effective-interest method employed). (Round answers to 2 decimal places, e.g. 52.75. Credit account titles are automatically indented when 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 c. 31, 2025 Interest Expense Notes Payable Cash Discount on Notes Payable Debit 6600 16,500 Credit 6600 16500 Prepare the journal entry at December 31, 2026, to record the payment and interest (effective-interest method employed). (Round answers to 2 decimal places, e.g. 52.75.…
On April 1, 2021, ABC CO. issued a 9% interest bearing note with a face amount of P 30,000,000 for the purchase of a machine. The note is payable in five equal annual installments starting on March 31,2022. Interest is payable annually base on the remaining balance. There is no established cash price for the equipment. The prevailing market rate of interest for a note of this type is 12%.How much is the interest expense for the year 2023?
Dimagiba Company began operation at the beginning of 2021. During the year, it had cash sales of 6,875,000 and sales on installment basis of 16,500,000. Dimagiba adds a markup on cost of 25% on cash sales and 50% on installment sales. Installments receivable at the end of 2021 is 6,600,000. The resulting realized gross profit for 2021 is:
Towline Corporation borrowed S75,000.00 at 11% compounded monthly for 10 years to buy a warehouse. Equal payments are made at the end of every month. (a) Determine the size of the monthly payments (b) Compute the interest included in payment 37. (c) Determine the principal repaid in payment period 7. (d) Construct a partial amortization schedule showing details of the first three payments, the last three payments, and totals (a) The size of the monthly payment is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
On July 01, 2021, Emerald Corporation sold a set of washing machine and a dryer for a total contract price of P200,000. The stand-alone selling prices of the washing machine and the dryer if sold separately are: 150,000 and 70,000, respectively. A 20% down payment was made and the balance is payable in six (6) equal installment payments of P28,564, inclusive of 2% interest, payable quarterly starting September 30 and December 31, 2021. How much is the total amount of interest earned in 2021?
Pisbol Company sold an equipment with a carrying amount of $750,000 on April 1,2020. Pisbol received a promissory note which bears an interest of 12% payable annually with a face value of $1,000,000. The principal is payable after 4 years from April 1,2020. The prevailing market rate of interest is 10%. (For present value factors, do not round off) How much is the interest income for year 2021 and carrying value of the notes as of December 31,2021?
American Food Services, Incorporated, acquired a packaging machine from Barton and Barton Corporation. . Barton and Barton completed construction of the machine on January 1, 2024. In payment for the $4.9 million machine, American Food Services Issued a four-year Installment note to be paid in four equal payments at the end of each year. • The payments Include Interest at the rate of 12%. Required: 1. Prepare the journal entry for American Food Services purchase of the machine on January 1, 2024. 2. Prepare an amortization schedule for the four-year term of the installment note. 3. Prepare the journal entry for the first installment payment on December 31, 2024. 4. Prepare the Journal entry for the third Installment payment on December 31, 2026. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) · Complete this question by entering your answers in the tabs below. Req 2 Req 1 3 and 4 Prepare an amortization schedule…
LCD Industries purchased a supply of electronic components from Entel Corporation on November 1, 2024. In payment for the $24.7 million purchase, LCD issued a 1-year installment note to be paid in equal monthly payments at the end of each month. The payments include interest at the rate of 24%. Required: 1. & 2. Prepare the journal entries for LCD’s purchase of the components on November 1, 2024 and the first installment payment on November 30, 2024. 3. What is the amount of interest expense that LCD will report in its income statement for the year ended December 31, 2024?
Harper Co. funds the acquisition of equipment on January 1, year 8 by issuing a $15,000 non-interest-bearing note payable. Beginning on December 31, year 8, the debt will be paid off in ten equal yearly payments. The market rate of interest for this sort of note is 5%. Given the facts below, how much should Harper Co. report the equipment on its December 31, year 8 balance sheet? For ten periods, the present value of $1 at 5% is 0.61391. The present value of a $1 regular annuity at 5% for ten periods is 7.72173. The current value of a $1 annuity payable in ten periods at 5% is 8.10782 8.10782
LCD Industries purchased a supply of electronic components from Entel Corporation on November 1, 2024. In payment for the $24.8 million purchase, LCD issued a 1-year installment note to be paid in equal monthly payments at the end of each month. The payments include interest at the rate of 12%. Required: 1. & 2. Prepare the journal entries for LCD's purchase of the components on November 1, 2024 and the first installment payment on November 30, 2024. 3. What is the amount of interest expense that LCD will report in its income statement for the year ended December 31, 2024?
On January 1, year 8 Harper Co. finances the purchase of equipment by issuing a $15,000 non-interest-bearing note payable. The note will be paid off in 10 equal annual installments beginning on December 31, year 8. The market rate of interest for notes of this type is 5%. Considering the information below, at what amount should Harper Co. report the equipment on its balance sheet dated December 31, year 8? The present value of $1 at 5% for 10 periods 0.61391 The present value of an ordinary annuity of $1 at 5% for 10 periods 7.72173 The present value of an annuity due of $1 at 5% for 10 periods is 8.10782 8.10782
Bright Inc. acquired a debt of $252,000. Acme agrees to repay the loan with payments of $13,500 made at the end of every three months. Interest is 8.52% compounded semi-annually. Answer the following questions in the designated input box (Format currency with $, commas and two decimal places): Input Box #3: What is the principal repaid in the 15th payment? Input Box #4: What is the cost of the debt (i.e. the interest paid) for the first two years? Input Box #5: What is the outstanding balance after the 11th payment?