On January 1, 20x1, PRISM Co. acquired machinery by issuing a 3-year, P1,200,000 noninterest-bearing note payable due as follows:Date Amount of installmentDecember 31, 20x1 600,000December 31, 20x2 400,000December 31, 20x3 200,000TOTAL 1,200,000The prevailing rate of interest for this type of note is 10%.How much is the carrying amount of the note on December 31, 20x1?Select the correct response:867,3121,026,296528,926489,762

The present value of a future cash flow is the amount of all future cash flows. The present value of…

On January 1, 20x1, PRISM Co. acquired machinery by issuing a 3-year, P1,200,000 noninterest-bearing note payable due as follows: Date Amount of installment December 31, 20x1 600,000 December 31, 20x2 400,000 December 31, 20x3 200,000 FOTAL 1,200,000 he prevailing rate of interest for this type of note is 10%. How much is the carrying amount of the note on December 31, 20x1? Select the correct response: 867,312 O 1,026,296 528,926 O 489,762

On January 1, 20x1, PRISM Co. acquired machinery by issuing a 3-year, P1,200,000 noninterest-bearing note payable due as follows: Date Amount of installment December 31, 20x1 600,000 December 31, 20x2 400,000 December 31, 20x3 200,000 FOTAL 1,200,000 he prevailing rate of interest for this type of note is 10%. How much is the carrying amount of the note on December 31, 20x1? Select the correct response: 867,312 O 1,026,296 528,926 O 489,762

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

TORR, Inc. issues a $300,000, 6%, five-year note payable on January 1, 20X1. If the monthly payment is $5,800, what is the note's carrying value after the first month's payment is made on January 31, 20X1? Select one: a. $294,200 b. $300,000 c. $298,500 d. $295,700 e. $298,214
Adams Acrobats lent $17,147 to Donaldson, Inc., accepting Donaldson's 2-year, $20,000, zero-interest-bearing note. The implied interest rate is 8%. Prepare Adams's journal entries for the initial transaction, recognition of interest each year, and the collection of $20,000 at maturity. (Round answers to O decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Account Titles and Explanation (To record the initial transations) (To record the recognition of interest in year one) (To recognize the interest in year 2) (To record the collection of the note) Debit Credit INT
8
On June 8, Williams Company issued an $80,000, 5%, 120-day note payable to Brown Industries. Assuming a 360-day year, what is the maturity value of the note? When required, round your answer to the nearest dollar. a. $82,600 b. $84,000 c. $81,333 d. $88,200
On April 1, Year 1, Halo Co. issued a $5,000 face value discount note to the Capri Bank. The note had a 12 percent discount rate and a one-year term. 8. The amount of cash Halo received on April 1, Year 1, was a. $5,000. b. $4,250. c. $4,400. d. $5,500. 9. The total carrying value of Halo’s liabilities on December 31, Year 1, would be a. $5,600. b. $5,000. c. $5,450. d. $4,850. 10. If Halo Co. earned $2,000 of revenue in Year 1, the amount of net income would be a. $2,000. b. $1,550. c. $1,400. d. $1,850.
Tony Acrobats lent $44,639 to Donaldson, Inc., accepting Donaldson's 2-year, $55,000, zero-interest-bearing note. The implied interest rate is 11%. Prepare Tony's journal entries for the initial transaction, recognition of interest each year, and the collection of $55,000 at maturity. (Round answers to O decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Account Titles and Explanation (To record the initial transations) (To record the recognition of interest in year one) Debit I Credit
Bright Inc. acquired a debt of $252,000. Acme agrees to repay the loan with payments of $13,500 made at the end of every three months. Interest is 8.52% compounded semi-annually. Answer the following questions in the designated input box (Format currency with $, commas and two decimal places): Input Box #3: What is the principal repaid in the 15th payment? Input Box #4: What is the cost of the debt (i.e. the interest paid) for the first two years? Input Box #5: What is the outstanding balance after the 11th payment?
On January 1, year 8 Harper Company finances the purchase of equipment by issuing a $15,000 non-interest-bearing note payable. The note will be paid off in 10 equal annual installments beginning on December 31, year 8. The market rate of interest for notes of this type is 5%. Considering the information below, at what amount should Harper Company report the equipment on its balance sheet dated December 31, year 8? The present value of $1 at 5% for 10 periods 0.61391 The present value of an ordinary annuity of $1 at 5% for 10 periods 7.72173 The present value of an annuity due of $1 at 5% for 10 periods is 8.10782 8.10782 Multiple Choice $9,209 $11,583 $12,162 $15,000
On December 30, Year 1, ABC Corporation sold a machine to DEF Corporation in exchange for a non-interest bearing note requiring ten annual payments of P10,000. DEF made the first payment on December 30, Year 1. The market interest rate for similar notes at date of issuance was 8%. Information on present value factors is as follows: For 9 periods, the present value of P1 at 8% is 0.50 while the present value of ordinary annuity of P1 at 8% is 6.25. Meanwhile, for 10 periods, the present value of P1 at 8% is 0.46 and the present value of ordinary annuity of P1 at 8% is 6.71. In its December 31, Year 1 balance sheet, what amount should ABC Corporation report as note receivable? *
Lime Co. incurs a $4,000 note with equal principal installment payments due for the next eightyears. What is the amount of the current portion of the noncurrent note payable due in the second year?A. $800B. $1,000C. $500D. nothing, since this is a noncurrent note payable
On January 1, Year 1, Zero Company obtained a $52,000, 4-year, 6.5% installment note from Regional Bank. The note requires annual payments of $15,179, beginning on December 31, Year 1. The December 31, Year 3 carrying amount in the allocation of periodic payments table for this installment note will be equal to:- $6,463 $13,000 $14,252 $0