On January 2, 2009, Easy Pay Co. sold aplant to Menchie Co. for P1,500,000. On thatdate, the plant's carrying amount wasP1,000,000. Menchie gave Easy PayP300,000 cash and a P1,200,000 note,payable in four annual installments ofP300,000 plus 12% interest. Menchie madethe first principal and interest payment ofP444,000 on December 31, 2009. Easy Payuses the installment method of revenuerecognition. In its 2009 income statement,what amount of realized gross profit shouldEasy Pay report?

Sales Price of Plant=P1,500,000 Cost or carrying value=P1,000,000 Gross Profit=P500,000 Sales…

Answered: On January 2, 2009, Easy Pay Co. sold a…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Pisbol Company sold an equipment with a carrying amount of $750,000 on April 1,2020. Pisbol received a promissory note which bears an interest of 12% payable annually with a face value of $1,000,000. The principal is payable after 4 years from April 1,2020. The prevailing market rate of interest is 10%. (For present value factors, do not round off) How much is the interest income for year 2021 and carrying value of the notes as of December 31,2021?
American Food Services, Incorporated, acquired a packaging machine from Barton and Barton Corporation. . Barton and Barton completed construction of the machine on January 1, 2024. In payment for the $4.9 million machine, American Food Services Issued a four-year Installment note to be paid in four equal payments at the end of each year. • The payments Include Interest at the rate of 12%. Required: 1. Prepare the journal entry for American Food Services purchase of the machine on January 1, 2024. 2. Prepare an amortization schedule for the four-year term of the installment note. 3. Prepare the journal entry for the first installment payment on December 31, 2024. 4. Prepare the Journal entry for the third Installment payment on December 31, 2026. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) · Complete this question by entering your answers in the tabs below. Req 2 Req 1 3 and 4 Prepare an amortization schedule…
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[The following information applies to the questions displayed below.] On January 1, 2018, Brown Co. borrowed cash from First Bank by issuing a $100,000 face value, four-year term note that had an 8 percent annual interest rate. The note is to be repaid by making annual cash payments of $30,192 that include both interest and principal on December 31 of each year. Brown used the proceeds from the loan to purchase land that generated rental revenues of $52,000 cash per year. b. Organize the information in accounts under an accounting equation. (Round your answers to the nearest whole dollar amount. Enter any decreases to account balances with a minus sign. If there is no effect on the Accounts Titles / Retained Earnings, leave the cell blank.) BROWN CO. Effect of Events on the Accounting Equation 2018, 2019, 2020 and 2021 Stockholders Equity Retained Earnings Assets = Liabilities Accounts Titles / Event Retained Earnings Notes Payable Cash Land 2018 1/1 1/1 %3D 12/31 12/31 Bal. 2019 Beg.…
American Food Services, Inc., acquired a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2021. In payment for the $4 million machine, American Food Services issued a four-year installment note to be paid in four equal payments at the end of each year. The payments include interest at the rate of 10%.Required:1. Prepare the journal entry for American Food Services’ purchase of the machine on January 1, 2021.2. Prepare an amortization schedule for the four-year term of the installment note.3. Prepare the journal entry for the first installment payment on December 31, 2021.4. Prepare the journal entry for the third installment payment on December 31, 2023.
LCD Industries purchased a supply of electronic components from Entel Corporation on November 1, 2021. In payment for the $25.2 million purchase, LCD issued a 1-year installment note to be paid in equal monthly payments at the end of each month. The payments include interest at the rate of 18%.(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.)Required:1. & 2. Prepare the journal entries for LCD’s purchase of the components on November 1, 2021 and the first installment payment on November 30, 2021.3. What is the amount of interest expense that LCD will report in its income statement for the year ended December 31, 2021?
15. On January 1, 20x1, ABC sold a used vehicle with a historical cost of P2,000,0000 and accumulated depreciation of P700,000 in exchange for cash of P100,000 and a noninterest bearing note receivable of P1,000,000 due in 4 equal annual installments starting on December 31, 20x1 and every December 31, thereafter. The prevailing rate of interest for this type of note is 12%. On December 31, 20x3, the current portion of the note receivable is approximately (use 6-decimal present value factor)

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