Instructions: Answer the following questions. a. At what amount should XYZ record the equipment on the date of acquisition? Use the present value tables and Excel. b. Prepare the journal entry to record the equipment purchase. c. Prepare the journal entries to record the payments XYZ makes at the end of the first and the end of the second year.
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D.25.
![Canvas Problem: Long-Term Notes Payable
XYZ, Inc. has purchased new equipment. The
contract with the manufacturer requires XYZ to make
a $10,000 down payment and to sign a note to pay
$50,000 per year at the end of each of the next 6
years at an annual interest rate of 8%. Each equal
payment of $50,000 includes principal and interest
on the unpaid balance.
Instructions: Answer the following questions.
a. At what amount should XYZ record the
equipment on the date of acquisition? Use the
present value tables and Excel.
b. Prepare the journal entry to record the
equipment purchase.
c. Prepare the journal entries to record the
payments XYZ makes at the end of the first and
the end of the second year.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4daeda3b-5278-4fa7-b2ce-c352b31ca222%2F2f0a363c-40f7-43c5-8357-ffdc0be133de%2Fs8maalt_processed.jpeg&w=3840&q=75)
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- Canvas Problem: Long-Term Notes Payable XYZ, Inc. has purchased new equipment. The contract with the manufacturer requires XYZ to make a $10,000 down payment and to sign a note to pay $50,000 per year at the end of each of the next 6 years at an annual interest rate of 8%. Each equal payment of $50,000 includes principal and interest on the unpaid balance. Instructions: Answer the following questions. a. At what amount should XYZ record the equipment on the date of acquisition? Use the present value tables and Excel. b. Prepare the journal entry to record the equipment purchase. c. Prepare the journal entries to record the payments XYZ makes at the end of the first and the end of the second year.A company decides to obtain a small-business loan of $237,000. The financial institution from which the company borrows offers two options: a. Borrow $237,000 at 6% with monthly payments of $4,581.87 over 5 years. b. Borrow $237,000 at 7% with monthly payments of $2,751.77 over 10 years. Required: Record the issuance of an installment note payable under each option. Record the payments for the first and second month under each option. Determine the total amount of interest paid under each option over the full period of the note.Crab State Bank has offered you a $500,000 5-year loan at an interest rate of 9.75 percent, requiring equal annual end-of-year payments that include both principal and interest on the unpaid balance. Develop an amortization schedule for this loan. Round your answers to the nearest dollar. Do not round intermediate calculations. End of Year Payment Interest (9.75%) Principal Reduction Balance Remaining 0 - - - $500,000 1 $ $ $ 2 3 4 5
- Problem #2: Installment Note Preferred Corporation purchases an asset and finances it with a note payable. Information regarding the transaction follows: YOU WILL NÉED THE KIESO PRESENT VALUE TABLES FOR THIS PROBLEM. Cost of asset 450,000 450,000 12% years times per year Amount Financed Annual Interest Rate Installment loan term Payments are made USE PROBLEM #2 TO ANSWER QUESTIONS 8 THRU 10 BELOW 8.) Calculate the periodic payment on the note payable. 9.) What is the total amount of interest that will be paid on the note payable over the two year period? 10.) If the company wishes to get the loan paid off in ONE year instead what will the new quarterly payments be?Akuse Tours company secures a loan of GHS200,000 over 2 years at 10.5% compounded quarterly year to purchase more tour buses for the upcoming Christmas festivities. Requirements: a. Compute the quarterly installment the entity will be required to pay. b. Prepare a spreadsheet model indicating the installment and the loan amortization schedule.Prepare an amortization schedule for a five-year loan of $47,000. The interest rate is 7% per year, and the loan calls for equal annual payments. (Do not round intermediate calculations. Enter all amount as positive value. Round the final answers to 2 decimal places. Leave no cells blank - be certain to enter "O" wherever required.) Year 1 Beginning Balance $ 2 2 3 4 5 Total Payment $ Interest Payment Principal Payment Ending Balance $ How much interest is paid in the third year? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Interest paid $ How much total interest is paid over the life of the loan? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Total interest $
- Saved Prepare an amortization schedule for a five-year loan of $70,000. The interest rate is 9 percent per year, and the loan calls for equal annual payments. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. Leave no cells blank - be certain to enter "O" wherever required.) Year Beginning Balance Total Payment Interest Payment Principal Payment Ending Balance 1 3 4. How much interest is paid in the third year? (Do not round intermediate-calculations 2. 5Prepare an amortization schedule for a three-year loan of $117,000. The interest rate is 8 percent per year, and the loan calls for equal annual payments. How much total interest is paid over the life of the loan? Note: Leave no cells blank. Enter '0' where necessary. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. Year 1 2 3 $ Beginning Balance 117,000.00 Total Payment Total interest Interest Payment Principal Payment Ending BalanceA borrower has two alternatives for a loan: (1) issue a $420,000, 30-day, 6% note or (2) issue a $420,000, 30-day note that the creditor discounts at 6%. Assume a 360-day year. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Calculate the amount of the interest expense for each option. Round your answer to the nearest dollar. $ fill in the blank 2 for each alternative. Determine the proceeds received by the borrower in each alternative. Round your answers to the nearest dollar. (1) $420,000, 30-day, 6% interest-bearing note: $ fill in the blank 3 (2) $420,000, 30-day note discounted at 6%: $ fill in the blank 4 Alternative 1 is more favorable to the borrower because the borrower receives more cash .
- Prepare an amortization schedule for a five-year loan of $70,000. The interest rate is 9 percent per year, and the loan calls for equal annual payments. Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. Year 1 2 3 4 5 $ Beginning Balance 70,000.00 $ 58,421.11 X 45,800.12 X 32,043.24 x 16,094.24 x > Answer is complete but not entirely correct. Total Interest Payment Payment 17,996.47 $ 17,996.47✔ 17,996.47 ✔ 17,996.47 ✔ 17,996.47✔ Answer is complete and correct. 6,300.00 $ 5,257.90 X 4,122.01 X Total interest paid $ 19,982.35 2,884.90 X 1,444.43 x Principal Payment Ending Balance How much total interest is paid over the life of the loan? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. 11,696.47 $ $ 58,303.53 12,738.57✔ 57,261.43 X 13,874.46 X 56,125.54 X 15,111.57 X 54,888.43 X 16,552.04 X 53,447.96 XOn quesiton C: Johnson’s borrowed $282,000 at a(n) 9 percent annual interest rate on April 1 of the current year to expand its boat storage facility. The loan requires Johnson’s to pay the interest quarterly until the note is repaid in three years. Johnson’s paid quarterly interest on July 1 and October 1. Can you explain why the forumla is 282000*9%*2/12? I understand 282000*9% = 25380 (yearly interest) But why mulitpy by 2?(c) Pearl Inc. loans money to John Kruk Corporation in the amount of $832,000. Pearl accepts an 8% note due in 7 years with interest payable semiannually. After 2 years (and receipt of interest for 2 years), Pearl needs money and therefore sells the note to Chicago National Bank, which demands interest on the note of 10% compounded semiannually. What is the Amount received on sale of note LINK TO TEXT LINK TO TEXT LINK TO TEXT
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