Last year the company exchanged a piece of land for a non-interest - bearing note. The note is to be paidat the rate of $16, 100 per year for 9 years, beginning one year from the date of disposal of the land. Anappropriate rate of interest for the note was 11 % . At the time the land was originally purchased, it cost $84,400. What is the fair value of the note? (Round factor values to 5 decimal places, e.g. 1.25124 andfinal answer to 0 decimal places, eg. 458, 581 .) The fair value of the note $ Last year the company exchanged a piece of land for a non-interest-bearing note. The note is to be paid at the rate of $16,100 peryear for 9 years, beginning one year from the date of disposal of the land. An appropriate rate of interest for the note was 11%. Atthe time the land was originally purchased, it cost $84,400.What is the fair value of the note? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g.458,581.)The fair value of the note$

The objective of the question is to calculate the fair value of the non-interest-bearing note that…

Answered: Last year the company exchanged a piece…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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2. ABC Realty sold a piece of land for P250,000. A down payment of P50,000 was made and the remainder is to be paid in equal semiannual installments, the first due 6 months after the date of sale. The interest is 8% compounded semiannually and the debt is to be amortized in 5 years. a. How much semiannual payment is required? b. What will the total amount of the payment be? c. How much interest will be paid? d. What is the total cost of the property? e. Prepare an amortization schedule for the present value of the loan after making the down payment.
On January 1, 2011, ABC Corporation bought a machine on P 600,000, 14% , 3-year, note payable. The note will be paid in six equal semi-annual payments starting June 30, 2022. ABC Corp. should record the cost of the machine as:A. P 399,800B. P 600,000C. P 684,000D. P 404,980
On January 1, 2024, the Ward Company purchased land from the Fisher Company in exchange for a $1,000,000 face value noninterest-bearing note payable, due in five equal installments of $200,000, with the first payment due December 31, 2024. The face value of the note includes interest and principal. There was no established interest rate for this note but the prevailing interest rate for similar notes is 12% APR. Present value factors from tables are listed below: Present value of single sum, 5 periods, 12% Present value of ordinary annuity, 5 periods, 12% Present value of annuity due, 5 periods, 12% Future value of single sum, 5 periods, 12% 0.56743 3.60478 4.03735 1.76234 Future value of ordinary annuity, 5 periods, 12% 6.35285 Instructions: Prepare the journal entries to record: (A) the issuance of the note payable on January 1, 2024, and (B) the first payment on December 31, 2024 and any amortization, assuming the effective interest rate method is used.
On January 1, 20x9, Fairness Company sold a tract of land that was acquired years ago for P 3,000,000. Fairness received a three year non-interest bearing note for P 6,000,000 in exchange for the land, but the current market rate of interest for comparable notes is 10%. The note is payable in equal annual instalments of P 2,000,000 every December 31 starting December 31, 20x9. a. Compute for the carrying value of the note on January 1, 20x9b. Compute for the gain or loss on salec. Compute for the interest income recognized in 20x11.d. Compute for the carrying value of the note in December 31, 20x10e. Prepare all entries.
Pina Corporation purchased a special tractor on December 31, 2020. The purchase agreement stipulated that Pina should pay $19,650 at the time of purchase and $5,220 at the end of each of the next 8 years. The tractor should be recorded on December 31, 2020, at what amount, assuming an appropriate interest rate of 12%? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.) Cost of tractor to be recorded $
A 7-year, $5,000 promissory note bearing interest at j12-7.20% was sold to a buyer after 2 years. The buyer purchased the note at a price that would yield them j4=6.00%. a) Calculate the maturity value of the note: b) Calculate the price the buyer paid (at the 2 year mark): c) What rate did the original holder of the note earn over the 2 year period that they held it? Express your answer as an annual effective rate (j1) to 2 decimal places. Do not include the % symbol.
On February 1, 20x1, TSR Co. sold machinery with historical cost of P3,000,000 and accumulated depreciation of P900,000 in exchange for a 3-year, P2,100,000 noninterest-bearing note receivable due in equal semi-annual payments every August 1 and February 1 starting on August 1, 20x1. The prevailing rate of interest for this type of note is 10%. How much is the interest income in 20x2?
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).
Can anyone help me to answer this ?
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.
Culver Inc. bought an Internet domain name by issuing a $276,000, 6-year, non-interest-bearing note to Ti-Mine Corp. with an effective yield of 10%. The note is repayable in 6 annual payments of $46,000 made at the end of each year. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1. Prepare the journal entry to record the purchase of the intangible asset. (Round factor values to 5 decimal places, eg. 1.25124 and final answer to O decimal places, eg. 5,275. 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 O for the amounts.) Account Titles and Explanation Debit Credit Notes Payable
Canliss Mining Company borrowed money from a local bank. The note the company signed requires five annual installment payments of $10,000 beginning one year from today. The interest rate on the note is 7%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) What amount did Canliss borrow? (Round your final answers to nearest whole dollar amount.)

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