Kingbird Corp. sells idle machinery to Enyart Company on July 1, 2020, for $46,000. Kingbird agrees to repurchase this equipment from Enyart on June 30, 2021, for a price of $49,680 (an imputed interest rate of 8%). (a) Prepare the journal entry for Kingbird for the transfer of the asset to Enyart on July 1, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)

Kingbird Corp. sells idle machinery to Enyart Company on July 1, 2020, for $46,000. Kingbird agrees to repurchase this equipment from Enyart on June 30, 2021, for a price of $49,680 (an imputed interest rate of 8%). (a) Prepare the journal entry for Kingbird for the transfer of the asset to Enyart on July 1, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)

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

Please help me to solve this problem
Accounting for Special Transactions On January 1, 2019, Castrano enters into a non-cancellable contract with Recio for the sale of an excavatorfor P700,000. The excavator will be delivered to Recio on April 1, 2019. The contract requires Recio to pay the P700,000 in advance on February 1, 2019 and Recio makes the payment on March 1, 2019. On January 1, 2019, the amount of accounts receivable to be recorded:a. None b. P350,000 c. P700,000 d. P1,400,0005. On January 1, 2019, the amount of revenues to be recorded:a. None b. P350,000 c. P700,000 d. P1,400,000
Arctic Cat sold Seneca Motor Sports a shipment of snowmobiles that have a fair market value of $39,500. Seneca paid for the snowmobiles on January 1, 2024, with delivery to occur subsequently. Unless informed otherwise, assume that Arctic views the time value of money component of this arrangement to be significant and that the relevant interest rate is 5%. Required: Assume that, on January 1, 2024, Seneca prepays Arctic for a December 31, 2024, delivery of the snowmobiles. Prepare the journal entry for Arctic to record collection on January 1, 2024, assuming Seneca prepays the present value of the snowmobiles. Prepare the journal entry for Arctic to record delivery of the snowmobiles on December 31, 2024. Assume instead that delivery is to occur on December 31, 2025. Prepare the journal entry for Arctic to record collection on January 1, 2024, assuming Seneca prepays the present value of the snowmobiles. Assume instead that Arctic does not view the time value of money component of…
On January 1, 2025, Flounder Corporation sold a building that cost $274,530 and that had accumulated depreciation of $105,600 on the date of sale. Flounder received as consideration a $264,530 non-interest-bearing note due on January 1, 2028. There was no established exchange price for the building, and the note had no ready market. The prevailing rate of interest for a note of this type on January 1, 2025, was 9%. At what amount should the gain from the sale of the building be reported? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.) The amount of gain should be reported (b) Your answer is incorrect. $ Flounder must pay for the bonds 35335 On January 1, 2025, Flounder Corporation purchased 349 of the $1,000 face value, 9%, 10-year bonds of Walters Inc. The bonds mature on January 1, 2035, and pay interest annually beginning January 1, 2026. Flounder purchased the bonds to yield 11%. How much did Flounder pay for the bonds?…
Presented below is selected information for Sheridan Company. Answer the questions asked about each of the factual situations. (Do not leave any answer field blank. Enter O for amounts.) 1. Sheridan purchased a patent from Vania Co. for $1,160,000 on January 1, 2018. The patent is being amortized over its remaining legal life of 10 years, expiring on January 1, 2028. During 2020, Sheridan determined that the economic benefits of the patent would not last longer than 6 years from the date of acquisition. What amount should be reported in the balance sheet for the patent, net of accumulated amortization, at December 31, 2020? The amount to be reported $ 2. Sheridan bought a franchise from Alexander Co. on January 1, 2019, for $330,000. The carrying amount of the franchise on Alexander's books on January 1, 2019, was $330,000. The franchise agreement had an estimated useful life of 30 years. Because Sheridan must enter a competitive bidding at the end of 2021, it is unlikely that the…
On Jan 1 2020, SEK industries bought a specially built robot spray printer for its production line. The company issues a $100,000, five-year, zero interest-bearing note to Wrigley Robotics for the new equipment. The prevailing market rate of interest of obligations of this nature is 10%. Record the journal entries associated with this purchase on (a) December 31, 2020 (b) December 31, 2021 (c) December 31, 2022
On June 30, 2019, Liang sold its patent with a carrying value of $79,884 to Miller Enterprises for $5,000 cash and a note specifying ten annual payments of $10,000. The first payment was due June 30, 2020. Liang uses 8% as its discount rate. Which of the following would not be included in the journal entry to record the sale of the patent on June 30, 2019? Select one: O a. CR Discount on Note Receivable $32,899 b. CR Gain on Sale of Patent $7,783 c. CR Patent $79,884 * d. DR Cash $5,000 O e. All of the above would be included in the journal entry.
Bulls, Inc. leases a piece of equipment to Bucks Company on January 1, 2020. The contract stipulates a lease term of 5 years, with equal annual rental payments of $4,523 at the end of each year. Ownership does not transfer at the end of the lease term, there is no bargain purchase option, and the asset is not of a specialized nature. The asset has a fair value of $30,000, a book value of $27,000, and a useful life of 8 years. At the end of the lease term, Bulls expects the residual value of the asset to be $12,000, and this amount is guaranteed by a third party. Assuming Bulls wants to earn a 4% return on the lease and collectibility of the lease payments is probable, record its journal entry at the commencement of the lease on January 1, 2020.
as show in the pic
Mikkeli OY acquired a brand name with an indefinite life in 2021 for 43,600 markkas. At December 31, 2020, the brand name could be sold for 35,200 markkas, with zero costs to sell. Expected cash flows from the continued use of the brand are 45,870 markkas, and the present value of this amount is 34,200 markkas. Assume that Mikkeli OY is a foreign company using IFRS and is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to U.S. GAAP to prepare consolidated financial statements. Ignore income taxes. Required: Prepare journal entries for this brand name for the year ending December 31, 2020, under (1) IFRS and (2) U.S. GAAP. Prepare the entry(ies) that the U.S. parent would make on the December 31, 2020 conversion worksheet to convert IFRS balances to U.S. GAAP.
On October 10, 2020, Flounder Co. entered into a contract with Belisle Inc. to transfer Flounder’s specialty products (sales value of $9,200, cost of $6,500) on December 15, 2020. Belisle agrees to make a payment of $5,400 upon delivery and signs a promissory note to pay the remaining balance on January 15, 2021. What entries does Flounder make in 2020 on this contract?
On January 1, 2019, Tulip signed an agreement to operate as a franchise of Flower Service Inc. for an initial franchise fee of P850,000. Of this amount, P250,000 was paid when the agreement was signed and the balance was payable in four annual payments of P150,000 each, beginning January 1, 2020. The agreement provides that the down payment is not refundable and no future services are required of the franchisor. The present value of January 1, 2019 of the four annual payments discounted at 14% (the implicit rate for a loan of this type) is P437,000. The agreement also provides that 5% of the revenue from the franchise must be paid to the franchisor annually. Tulip's revenue from the franchise for 2019 was P900,000. Tulip estimates the useful life of the franchise to be ten years. Tulip incurred P780,000 of experimental and development costs in its laboratory to develop a patent which was granted on January 2, 2019. Legal fees and other costs associated with the registration of the…