On July 1, 2019, GAH Company sold equipment to Babe Company for P2,000,000. GAH accepted a 10%note receivable for the entire sales price.This note is payable in two equal installments of P1,000,000 plus accrued interest on December 31, 2019and December 31, 2020.On July 1, 2020, the entity discounted the note at a bank at an interest rate of 12%.What is the amount received from the discounting of note receivable?968,000987,0001,007,0001,034,000

Net Proceeds = Value of note receivable less discount Discount = ( Value of note ) * Discount rate…

Answered: On July 1, 2019, GAH Company sold…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On December 31, 2021, Roth Company issued a P1,000,000 face value note payable to Wake Company in exchange for services rendered to Roth. The note, made at usual trade terms, is due in nine months and bears interest, payable at maturity, at the annual rate of 3%. The market interest rate is 8%. At what amount should the note payable be reported in Roth’s December 31, 2021 balance sheet?
The Field Detergent Company sold merchandise to the Abel Company on June 30, 2021. Payment was made in the form of a noninterest-bearing note requiring Abel to pay $85,000 on June 30, 2023. Assume that a 10% interestrate properly reflects the time value of money in this situation.Required:Calculate the amount at which Field should record the note receivable and corresponding sales revenue on June 30, 2021.
On January 1, 2021, Cee Company sold a machine with a cost of P500,000 and carrying value of P150,000 to Tee Company. In lieu of cash payment, Tee Company gave Cee a 4-year, P100,000, 10% note. The note requires interest to be paid annually on December 31. The prevailing rate of interest for a note of this type is 16% and the principal amount of the note is to be paid in four equal annual instalments of P25,000 every December 31. Required: Compute the following: (Round off PV factors to 4 decimal places before multiplying.) 1. Gain or loss on sale of machinery (place parenthesis if loss) 2. Interest income
Barton Chocolates used a promissory note to borrow $1,350,000 on July 1, 2018, at an annual interest rate of 6 percent. The note is to be repaid in yearly installments of $270,000, plus accrued interest, on June 30 of every year until the note is paid in full (on June 30, 2023). Show how the results of this transaction would be reported in a classified balance sheet prepared as of December 31, 2018. (Do not round intermediate calculations.)
On January 1, 2019, a company sells a piece of equipment for a list price of $260,000. It receives $30,000 and accepts a note receivable for the remainder. The balance due is on December 31, 2021, and the note pays an annual interest of 3% every December 31st. Required: Assuming the customer’s borrowing rate is 5%, prepare all journal entries for 2019 and 2020 under IFRS.
A company sold goods to a customer in exchange for a 5-year, zero-interest-bearing note on January 1, 2021. The note has a face amount of $308,000. The company imputes a 10% interest rate on this zero-interest note transaction. Present value factor for 10% and 5 years, single sum is 0.62. In the journal entry made on 12/31/2022, the company will record Discount on Notes Receivable by $__________. (Please do not use your own present value tables or financial calculator.) (Please do not round your answer in any part of the computation.) (DO NOT put a plus or minus sign in front of the amount.)
On April 1, 2020 JKL Company discounted with recourse a 9-month, 10% note dated January 1, 2020 with face amount of P6,000,000. The bank discount rate is 12%. The discounting transaction is accounted for as a conditional sale with recognition of contingent liability. On October 1, 2020, the maker dishonored the note receivable. The entity paid the bank the maturity value of the note plus protest fee of P50,000. On December 31, 2020, the entity collected the dishonored note receivable in full plus 12% annual interest on the total amount due. What is the total amount collected from the customer on December 31, 2020?
Selkirk Company obtained a $24,000 note receivable from a customer on January 1, 2021. The note, along with interest at 8%, is due on July 1, 2021. On February 28, 2021, Selkirk discounted the note at Unionville Bank. The bank's discount rate is 10%. Required: Prepare the journal entries required on February 28, 2021, to accrue interest and to record the discounting for Selkirk. Assume that the discounting is accounted for as a sale. (do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.). Tab 1) Record the accrued interest earned. Tab 2) Record the discounting of note receivable. Date General Journal Debit Credit February 28, 2021 ____________________________ ___________ ____________ _____________________________ ____________ ____________…
President Company purchased merchandise from Captain Corporation on September 30, 2024. Payment was made in the form of a noninterest-bearing note requiring President to make six annual payments of $4,200 on each September 30, beginning on September 30, 2027. Required: Calculate the amount at which President should record the note payable and corresponding purchase on September 30, 2024, assuming that an interest rate of 8% properly reflects the time value of money in this situation. Note: Use tables, Can someone please give me the correct answer for this?
On January 1, 2021, Glanville Company sold goods to Otter Corporation. Otter signed an installment note requiring payment of $21,500 annually for five years. The first payment was made on January 1, 2021. The prevailing rate of interest for this type of note at date of issuance was 10%. Glanville should record sales revenue in January 2021 of: (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.) Multiple Choice $107,500 $81,502 $89,652 None of these answer choices are correct.
Sweet, Inc. issued a $120,000, 4-year, 8% note at face value to Flint Hills Bank on January 1, 2025, and received $120,000 cash. The note requires annual interest payments each December 31. Prepare Sweet's journal entries to record (a) the issuance of the note and (b) the December 31 interest payment. (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.) No. Date (a) (b) Account Titles and Explanation Debit Credit
On December 31, 2021, Chang Company sold a machine in the ordinary course of business to Door Company in exchange for a noninterest bearing note requiring ten annual payments of P1,000,000. The entity made the first payment on December 31, 2021. The market interest rate for similar notes at date of issuance was 8%. PV of an ordinary annuity of 1 at 8% for 9 periods 6.25 PV of an ordinary annuity of 1 at 8% for 10 periods 6.71 4. What is the carrying amount of the note receivable on December 31, 2022? a. 8,000,000 b. 6,750,000 с. 5,250,000 d. 5,750,000

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