On January 1, 2020, Concord Company makes the two following acquisitions. 1. Purchases land having a fair value of $370,000 by issuing a 4-year, zero-interest-bearing promissory note in the face amount of $561,686. 2. Purchases equipment by issuing a 7%, 8-year promissory note having a maturity value of $550,000 (interest payable annually). The company has to pay 11% interest for funds from its bank. (a) Record the two journal entries that should be recorded by Concord Company for the two purchases on January 1, 2020. (b) Record the interest at the end of th

On January 1, 2020, Concord Company makes the two following acquisitions. 1. Purchases land having a fair value of $370,000 by issuing a 4-year, zero-interest-bearing promissory note in the face amount of $561,686. 2. Purchases equipment by issuing a 7%, 8-year promissory note having a maturity value of $550,000 (interest payable annually). The company has to pay 11% interest for funds from its bank. (a) Record the two journal entries that should be recorded by Concord Company for the two purchases on January 1, 2020. (b) Record the interest at the end of th

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization

Section: Chapter Questions

Problem 60P

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On July 1, 2019, Aldrich Company purchased as an available-for-sale security 200,000 face value, 9% U.S. Treasury notes for 194,000. The notes mature July 1, 2020, and pay interest semiannually on January 1 and July 1. The notes were sold on December 1, 2019, for 199,000. Aldrich normally uses straight-line amortization on all of its notes. In its income statement for the year ended December 31, 2019, what amount should Aldrich report as a gain on the sale of the available-for-sale security? a. 2,500 b. 3,500 c. 5,000 d. 6,000
On January 1, 2020, Blossom Company makes the two following acquisitions. 1. Purchases land having a fair value of $160,000 by issuing a 5-year, zero-interest-bearing promissory note in the face amount of $257,682. 2. Purchases equipment by issuing a 7%, 8-year promissory note having a maturity value of $230,000 (interest payable annually). The company has to pay 10% interest for funds from its bank. (a) Record the two journal entries that should be recorded by Blossom Company for the two purchases on January 1, 2020. (b) Record the interest at the end of the first year on both notes using the effective-interest method.
On January 1, 2020, Ivanhoe Company makes the two following acquisitions. 1. Purchases land having a fair value of $ 150,000 by issuing a 5-year, zero-interest-bearing promissory note in the face amount of $ 252,759. 2. Purchases equipment by issuing a 6%, 9-year promissory note having a maturity value of $ 180,000 (interest payable annually). The company has to pay 11% interest for funds from its bank. (a) Record the two journal entries that should be recorded by Ivanhoe Company for the two purchases on January 1, 2020. (b) Record the interest at the end of the first year on both notes using the effective-interest method. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
On January 1, 2020, Carter Company makes the two following acquisitions. 1. Purchases land having a fair value of $200,000 by issuing a 5-year, zero-interest-bearing promissory note in the face amount of $337,012. 2. Purchases equipment by issuing a 6%, 8-year promissory note having a maturity value of $250,000 (interest payable annually). The company has to pay 11% interest for funds from its bank. Instructions (Round answers to the nearest cent.) a. Record the two journal entries that should be recorded by Carter Company for the two purchases on January 1, 2020. b. Record the interest at the end of the first year on both notes using the effective-interest method.
On January 1, 2020, Sage Company makes the two following acquisitions. 1. Purchases land having a fair value of $220,000 by issuing a 4-year, zero-interest-bearing promissory note in the face amount of $333,975. 2. Purchases equipment by issuing a 7%, 8-year promissory note having a maturity value of $340,000 (interest payable annually). The company has to pay 11% interest for funds from its bank. (a) Record the two journal entries that should be recorded by Sage Company for the two purchases on January 1, 2020. (b) Record the interest at the end of the first year on both notes using the effective-interest method.
On January 1, 2020, Sweet Company makes the two following acquisitions. 1. Purchases land having a fair value of $260,000 by issuing a 5-year, zero-interest-bearing promissory note in the face amount of $458,209. 2. Purchases equipment by issuing a 6%, 9-year promissory note having a maturity value of $410,000 (interest payable annually). The company has to pay 12% interest for funds from its bank. (a) Record the two journal entries that should be recorded by Sweet Company for the two purchases on January 1, 2020. (b) Record the interest at the end of the first year on both notes using the effective-interest method. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Date Account…
January 1, 2020, Teal Company makes the two following acquisitions. 1. Purchases land having a fair value of $270,000 by issuing a 5-year, zero-interest-bearing promissory note in the face amount of $475,832. 2.Purchases equipment by issuing a 7%, 8-year promissory note having a maturity value of $360,000 (interest payable annually). The company has to pay 12% interest for funds from its bank. (a) Record the two journal entries that should be recorded by Teal Company for the two purchases on January 1, 2020. (b) Record the interest at the end of the first year on both notes using the effective-interest method.
On January 1, 2020, Pronghorn Company makes the two following acquisitions. 1. Purchases land having a fair market value of $220,000 by issuing a 5-year, zero-interest-bearing promissory note in the face amount of $323,252. 2. Purchases equipment by issuing a 5%, 8-year promissory note having a maturity value of $350,000 (interest payable annually).
On January 1, 2025, Sunland Company makes the two following acquisitions. 1. Purchases land having a fair market value of $860,000 by issuing a 5-year, zero-interest-bearing promissory note in the face amount of $1,263,622. 2. Purchases equipment by issuing a 5%, 9-year promissory note having a maturity value of $350,000 (Interest payable annually on January 1). The company has to pay 9% interest for funds from its bank. (a) Record the two journal entries that should be recorded by Sarasota Company for the two purchases on January 1, 2025. (b) Record the interest at the end of the first year on both notes using the effective-interest method.
On January 1, 2025, Sarasota Company makes the two following acquisitions. 1. Purchases land having a fair market value of $890,000 by issuing a 5-year, zero-interest-bearing promissory note in the face amount of $1,369375. 2. Purchases equipment by issuing a 5%, 9-year promissory note having a maturity value of $350,000 (Interest payable annually on January 1). The company has to pay 9% interest for funds from its bank. (a) Record the two journal entries that should be recorded by Sarasota Company for the two purchases on January 1, 2025. (b) Record the interest at the end of the first year on both notes using the effective-interest method.
On January 1, 2014, Fisher Company makes the two following acquisitions Purchases land having a fair market value of $800,000 by issuing a 5-year, zero - interest - bearing promissory note in the face amount of $1, 175, 464. 6 Purchases equipment by issuing a 4%, 8-year promissory note having a maturity value of $350,000 (interest payable annually). The company has to pay 8% interest for funds from its bank. (a) Record the two journal entries that should be recorded by Fisher Company for the two purchases on January 1, 2014. (b) Record the interest at the end of the first two years on both notes using the effective - interest method.
On January 1, 2025, Wildhorse Company makes the two following Acquisitions: 1. Purchase land having a fair value of $290,000.00 by issuing a 5-year zero-intrest-bearing promissory note in the face amount of $467,048. 2. Purchase equipment by issuing a 7%, 9-year promissory note having a maturity value of $450,000.00 (intrest payable annually) The company has to pay 10% intrest for funds from its bank. (a) Record two journal entries taht should be recorded by Wildhorse Comapny for the two purchases on January 1, 2025 (b) Record the intrest at the end of the first year on both notes using the effective-intrest method

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1.		Purchases land having a fair value of $370,000 by issuing a 4-year, zero-interest-bearing promissory note in the face amount of $561,686.
2.		Purchases equipment by issuing a 7%, 8-year promissory note having a maturity value of $550,000 (interest payable annually).

(a)		Record the two journal entries that should be recorded by Concord Company for the two purchases on January 1, 2020.
(b)		Record the interest at the end of th