On January 1, 2020, ABC Company sold property to the DEF Company. There was no established exchange price for the property, and DEF gave ABC a P2.000,000 non-interest bearing note payable in 5 equal annual installments of P400,000, with the first payment due December 31, 2020. The prevailing rate of interest for a note of this type is 9%. What should be the balance of the Discount on Notes Payable account on the books of DEF at December 31, 2021 after adjusting entries are made assuming that the effective interest method is used? * O P-0- O P 444,139.49 OP 187,482.13 OP 304,112.05
Q: On January 01, 2021, CPA Company sold equipment costing P760,000 with accumulated depreciation of…
A: Solution: Fair value of note on Jan 1, 2021 = P800,000 * PV of 1 at 5% for 4th period = P800,000 *…
Q: On December 31, 2021, LoL Co. was indebted to Garena Street Company on a P2M, 10% note. Only…
A: Debt Restructuring - It is kind of process which allows the public or private company facing cash…
Q: On January 1, 2022, SEEMLY HANDSOME Co., sold a used equipment for a ₱12,000,000 non-interest…
A: Solution: Computation of Carrying amount of note on initial recognition Installment Amount…
Q: On January 1, 2019, Erwan Company sold land to Heaven Company. There was no established market price…
A: Discount on Notes payable = Face value of Notes - present value of Notes = (P2,400,000- P1,989,600)…
Q: On January 1, 2019, Pag-asa Co. sold a machine to Estudyante Co.. In lieu of cash payment,…
A: Half Year Beginning Balance Interest @ 6.2% semi annually Installment paid Ending Balance…
Q: On January 1, 2019, Lithium Company sold equipment with a carrying amount of P4,800,000 in exchange…
A: As note is non interest bearing it will be recorded at discounted value To determine the interest…
Q: On January 1, 2020, Mil Company sold a building and received as consideration P1,000,000 cash and a…
A: Given, Book Value = P 1,000,000 Face Value = P 4,000,000 Rate = 10% Present Value = 0.75
Q: How much was Bae’s proceeds from the discounted note?
A: Bae inc. Sold equipment to Beau Inc. On july 1, 2020 for P250000. Bae accepted a note receivable…
Q: What should be the balance of the Discount on Notes Payable account on the books of ABC Company at…
A: Note payable- A promissory note or written agreement is referred to as a note payable. The…
Q: On January 1, 2019, Sobiono company sold land to Gliezel company. There were no established market…
A: As per PFRS 9 Financial instruments, Note payable will be considered as financial instrument as…
Q: n interest rate of 8% and is to be repaid in three annual installments of P200,000 plus interest on…
A: From the given values, the interest revenue as,
Q: On December 31, 2009, Mill Co. sold construction equipment to Drew, Inc. for P1,800,00. The…
A: Correct answer is P 250,000 Total amount of revenue should mill recognise from the construction…
Q: On July 1, 2019, GAH Company sold equipment to Babe Company for P2,000,000. GAH accepted a 10% note…
A: Net Proceeds = Value of note receivable less discount Discount = ( Value of note ) * Discount rate…
Q: On December 31, 2021, Chang Company sold a machihe in the ordinary course of business to Door…
A: Present value means the actual amount is adjusted with the interest rate so as to get the present…
Q: On January 1, 2020, Savage Company sold goods to another entity. The buyer signed a…
A: Hi student Since there are multiple questions, we will answer only first question.
Q: On January 2, 2020, Zyrus Company sold equipment with a carrying amount of P480,000 in exchange for…
A: Carrying value is considered as the cost of an asset minus accumulated depreciation. It is regarded…
Q: On January 1, 2020, Adobo Incorporated sold its aggregate equipment. The buyer issued a promissory…
A: Principal Outstanding Principal amount received Interest Total amount received PV…
Q: On January 1, 2020, Mewtwo Company sold a piece of equipment with a carrying amount of P1,500,000 to…
A: “Since you have asked multiple sub-parts, we will solve the first three sub-parts for you. If you…
Q: On December 31, 2020, Queen Company sold an equipment with carrying amount of P2,000,000 and…
A: The notes receivable is an asset account in the balance sheet of an organization. It is recorded…
Q: On December 31, 2018, COVID Company finished consultation services and accepted in exchange a…
A: Value of service is determined by using present value factor. Interest Revenue = Carrying Value…
Q: On January 1, 2020, CPA Incorporated sold its aggregate equipment. The buyer issued a promissory…
A: Principal Outstanding Principal amount received Interest Total amount received PV…
Q: On January 1, 2020, Pedro Company sold land that originally cost P400,000 to Buyer Company. As…
A: Answer - Part 4 - Calculation of the correct carrying amount of the notes receivable at December…
Q: SOSKE Company finished consultation services and accepted in exchange a promissory note with a face…
A: Given Interest rate = 5% Face Value = 2,00,000 Interest = 2,00,000*5% = $10,000 Present value can be…
Q: On December 31, 2019, Univ Corporation sold for 50,000 an old machine having an original cost of…
A: The fair value of note receivebale is the present value of cash inflows from trade receivable using…
Q: On January 2, 2020, Janice Company sold equipment with a carrying amount of 400,000 in exchange for…
A: Cost Accounting is the process of collecting, recording, analyzing the cost, summarizing cost,…
Q: On December 31, 2021, LoL Co. was indebted to Garena Street Company on a P2M, 10% note. Only…
A: The gain on settlement is the difference between the exiting notes and the settlement amount paid…
Q: Prepare an amortization table. Prepare all journal entries to record the transactions from January…
A: Year Opening balance Installment Interest Total Cash flow Closing balance 2020 60,00,000…
Q: XYZ Company is a dealer of equipment. On January 1 2020, the entity sold an equipment in exchange…
A: Given: Sold the equipment in exchange for non-interest bearing note requiring three annual payments…
Q: On January 1, 2021, The Corporation sold goods to Adobo Company. Adobo signed a noninterest-bearing…
A: Carrying amount of the note receivable on January 1, 2021 = Amount payable on January 1, 2021 +…
Q: On January 1, 2020, Pedro Company sold land that originally cost P400,000 to Buyer Company. As…
A: Answer - Part 1 - PV of consideration receivable (see computation b 503,105Carrying…
Q: On January 1, 2020, Jonathan Company borrowed P500,000 8% note due in four years. The present value…
A: "Since you have asked multiple sub part question we will solve the first three sub part question for…
Q: On January 1, 2020, Wilson Co. signed a three year note with Chase Bank. The note was for $10…
A: FASB (Financial Accounting Standards Board) is a body that sets accounting standards in accordance…
Q: On January 1 ,2020 ABC Company sold a building and received as consideration P1,000,000 cash and…
A: Noninterest bearing note = P4,000,000 Interest rate = 10% Present value of 1 at 105 for three…
Q: On January 1, 2020, Jonathan Company borrowed P500,000 8% note due in four years. The present value…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: On January 1, 2022, Jantzen Company sold land to Dansko Company. There was no established market…
A: Carrying Amount of Notes = Beginning Balance + Interest Accrued - Principal repaid
Q: On January 1, 2021, Gobert Company sold property to Beasley Company. There was no established…
A: Introduction: A journal entry is used to record a commercial transaction in the accounting records…
Q: XYZ Company is a dealer of equipment. On January 1 2020, the entity sold an equipment in exchange…
A: Note: Since you have posted a question with multiple sub-parts, we will solve the first three…
Q: On January 1, 2020, Physanto Corp. received in exchange for equipment sold to Viva Inc., an 8%…
A: The following calculations are done in the records of Physanto Corporation to evaluate the equipment…
Q: On January 1, 2022, Lorry Manufacturing Company purchased equipment from Wales Inc. There was no…
A: If there are no established price for an asset, then the asset shall be measured at transaction…
Q: On January 1, 2021, ABC Co. sold transportation equipment with a historical cost of P12,000,000 and…
A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…
Q: On January 1, 2021, Hornets Company sold land that originally cost P400,000 to Egi Company. As…
A: Stated rate of interest & market rate of interest rate are same. Therefore Interest revenue for…
Q: On January 1, 2021, ABC Company sold property to the DEF Company. There was no established exchange…
A: Answer- Total amount payable at December 31, 2021= annual installments x no. of annual installments…
Q: On January 1, 2020, Advanced Study Company sold a piece of land with a carrying amount of P8,000,000…
A: Amortization: When the market rate of interest is different from the coupon rate or carrying rate,…
Q: On January 1, 2021, ABC Company sold property to the DEF Company. There was no established exchange…
A: Annual Payment P4,00,000 Present value of an ordinary annuity of $1 at 9% for 5 period 3.88965126…
Q: On January 1, 2020, Jonathan Company borrowed P500,000 8% note due in four years. The present value…
A: ●1.What is the carrying amount of the note payable on December 31, 2020? Answer: Option 3: 408,150…
Q: On January 1, 2020, Wilson Co. signed a three year note with Chase Bank. The note was for $10…
A: ANSWER Accounting Standards Codification (ASC) 470-60 is the section that defines how Wilson…
Q: PRAISEWORTHY Company is a dealer in equipment. On January 1, 2020, PRAISEWORTHY Company sold an…
A: Present value of note = face value of note x PV of 1 at 8% for 5 periods = P3500000 x 0.68 =…
Q: On January 2, 2020, Zyrus Company sold equipment with a carrying amount of P480,000 in exchange for…
A: “Since you have posted a many questions, we will solve first question for you. To get the remaining…
Q: On January 01, 2021, VKS Company sold equipment costing P760,000 with accumulated depreciation of…
A: Present value of the note on January 01, 2021 = Face value of the Note x PV factor (5%, 4 years) =…
Q: The note shall be paid in equal annual installments (this is the series of amounts that Krisha will…
A: Calculation of Present value of note receivable Year Cash inflow Present Value factor @12%…
p6
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- On January 1, 2019, Northfield Corporation becomes delinquent on a 100,000, 14% note to First National Bank, on which 16,651 of interest has accrued. On January 2, 2019, the bank agrees to restructure the note. It forgives the accrued interest, extends the repayment date to December 31, 2021, and reduces the interest rate to 10%. Required: Prepare a schedule for Northfield to compute the annual interest expense in regard to the preceding note for each year of the restructuring agreement.On January 1, 2020, ABC Company sold property to the DEF Company. There was no established exchange price for the property, and DEF gave ABC a P2,000,000 non-interest bearing note payable in 5 equal annual installments of P400,000, with the first payment due December 31, 2020. The prevailing rate of interest for a note of this type is 9%.What should be the balance of the Discount on Notes Payable account on the books of DEF at December 31, 2021 after adjusting entries are made assuming that the effective interest method is used? A. P-0- B. P 444,139.49 C. P 187,482.13 D. P 304,112.05On January 1, 2020, ABC Company sold property to the DEF Company. There was no established exchange price for the property, and DEF gave ABC a P2,000,000 non-interest bearing note payable in 5 equal annual installments of P400,000, with the first payment due December 31, 2020. The prevailing rate of interest for a note of this type is 9%.What should be the balance of the Discount on Notes Payable account on the books of DEF at December 31, 2021 after adjusting entries are made assuming that the effective interest method is used? A. 0 B. 444,139.49 C.187,482.13 D. 304,112.05
- On January 1, 2021, ABC Company sold property to the DEF Company. There was no established exchange price for the property, and DEF gave ABC a P2,000,000 non-interest bearing note payable in 5 equal annual installments of P400,000, with the first payment due December 31, 2021. The prevailing rate of interest for a note of this type is 9%.What should be the balance of the Discount on Notes Payable account on the books of ABC Company at December 31, 2022 after adjusting entries are made assuming that the effective interest method is used?On January 1, 2021, ABC Company sold property to the DEF Company. There was no established exchange price for the property, and DEF gave ABC a P2,000,000 non-interest bearing note payable in 5 equal annual installments of P400,000, with the first payment due December 31, 2021. The prevailing rate of interest for a note of this type is 9%.What amount from the carrying value of the notes shall be presented as part of the non-current liabilities as of December 31,2023? P 703,644.47 P 336,672.00 P 366,972.48 P 308,873.39On January 1, 2021, ABC Company sold property to the DEF Company. There was no established exchange price for the property, and DEF gave ABC a P2,000,000 non-interest bearing note payable in 5 equal annual installments of P400,000, with the first payment due December 31, 2021. The prevailing rate of interest for a note of this type is 9%. What amount from the carrying value of the notes shall be presented as part of the non-current liabilities as of December 31,2023?
- On January 1, 2021, Gobert Company sold property to Beasley Company. There was no established exchange price for the property, and Beasley gave Gobert a $751,000 zero-interest- bearing note payable on January 1, 2025. The prevailing rate of interest for a note of this type is 6%. The property had a book value of $341,000 to Gobert. What should be the balance of the Discount on Notes Payable account on the books of Beasley at December 31, 2021 after adjusting entries are made, assuming that the effective-interest method is used?On January 1, 2021, Bonita Industries sold property to Sandhill Company. There was no established exchange price for the property, and Sandhill gave Bonita a $4500000 zero-interest-bearing note payable in 5 equal annual installments of $900000, with the first payment due December 31, 2021. The prevailing rate of interest for a note of this type is 9%. The present value of the note at 9% was $3500730 at January 1, 2021. What should be the balance of the Discount on Notes Payable account on the books of Sandhill at December 31, 2021 after adjusting entries are made, assuming that the effective-interest method is used? $713252. $684204. $999270. $0.On January 1, 2021, Marigold Corp. sold property to Cullumber Company which originally cost Marigold $2760000. There was no established exchange price for this property. Cullumber gave Marigold a $4170000 zero-interest-bearing note payable in three equal annual installments of $1390000 with the first payment due December 31, 2021. The note has no ready market. The prevailing rate of interest for a note of this type is 10%. The present value of a $4170000 note payable in three equal annual installments of $1390000 at a 10% rate of interest is $3456930. What is the amount of interest income that should be recognized by Marigold in 2021, using the effective-interest method? $417000. $0. $139000. $345693.
- On January 1, 2019, Erwan Company sold land to Heaven Company. There was no established market price for the land. heaven gave Erwan a P2,400,000 noninterest bearing note payable in three equal annual installments of P800,000 with the first payment due December 31, 2019. The note has no ready market. The prevailing rate of interest for a note of this type is 10%. The present value of a P2,400,000 note payable in three equal annual installments of P800,000 at a 10% rate of interest is P1,989,600. On January 1, 2019, how much should note payable be credited? A. 2,400,000B. 800,000C. 3,200,000D. P1,989,600On January 1, 2024, Whispering Winds Company sold property to Oriole Company which originally cost Whispering Winds $2640000. There was no established exchange price for this property. Oriole gave Whispering Winds a $4050000 zero - interest - bearing note payable in three equal annual installments of $1350000 with the first payment due December 31, 2024. The note has no ready market. The prevailing rate of interest for a note of this type is 10% . The present value of a $4050000 note payable in three equal annual installments of $1350000 at a 10% rate of interest is $3357250. What is the amount of interest income that should be recognized by Whispering Winds in 2024 if the effective - interest method is used? Select answer from the options below a. $405000 b. $135000 c. $0 d. $335725On January 1, 2022, Jantzen Company sold land to Dansko Company. There was no established market price for the land. Dansko gave Jantzen a P2,400,000 Zero-interest-bearing note payable in three equal annual installments of P800,000 with the first payment due December 31, 2022. The note has no ready market. The prevailing rate of interest for a note of this type is 10%. The present value of a P2,400,000 note payable in three equal annual installments of P800,000 at a 10% rate of interest is P1,989,600. The note will be reported on Dansko’s 2022 statement of financial position at a carrying value of P2,400,000 P2,188,560 P2,126,400 P1,388,560