On January 1, 2020, Advanced Study Company sold a piece of land with a carrying amount of P8,000,000 in exchange for a 5% promissory note with a face amount of P9,000,000. The note is payable in annual installments of P3,000,000 plus accrued interest on the outstanding balance. The first installment is due on December 31, 2020. There is no established cash price for the land and the note has no ready market. The prevailing interest for a note of this type is 10%. Requirements: (Round off present value factors to 4 decimal places). Prepare an amortization table. Prepare all journal entries to record the transactions from January 1, 2020 to December 31, 2022.

On January 1, 2020, Advanced Study Company sold a piece of land with a carrying amount of P8,000,000 in exchange for a 5% promissory note with a face amount of P9,000,000. The note is payable in annual installments of P3,000,000 plus accrued interest on the outstanding balance. The first installment is due on December 31, 2020. There is no established cash price for the land and the note has no ready market. The prevailing interest for a note of this type is 10%. Requirements: (Round off present value factors to 4 decimal places). Prepare an amortization table. Prepare all journal entries to record the transactions from January 1, 2020 to December 31, 2022.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 14RE: On January 1, 2019, Boater Company issues a 20,000 non-interest-bearing, 5-year note for equipment....

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On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10% interest rate. Each annual payment is in the amount of $39,569 and payment is due each Dec. 31. What is the journal entry on Jan. 1 to record the cash received and on Dec. 31 to record the annual payment? (You will need to prepare the first row in the amortization table to determine the amounts.)
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