On May 1, 2020, POPS Corporation issued a 5-year, 10%, P 1,000,000 note in exchange of a land with no established cash price. The note is payable in series of five equal annual installments every April 30 and pays annual interest based on the outstanding balance starting on April 30, 2021. The prevailing market rate of interest for a note of this type is 9%. As of December 31, 2021, how much must be presented as part of current liabilities in the Statement of Financial Position of ABC Corporation?
On May 1, 2020, POPS Corporation issued a 5-year, 10%, P 1,000,000 note in exchange of a land with no established cash price. The note is payable in series of five equal annual installments every April 30 and pays annual interest based on the outstanding balance starting on April 30, 2021. The prevailing market rate of interest for a note of this type is 9%. As of December 31, 2021, how much must be presented as part of current liabilities in the Statement of Financial Position of ABC Corporation?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1. On May 1, 2020, POPS Corporation issued a 5-year, 10%, P 1,000,000 note in exchange of a land with no established cash price. The note is payable in series of five equal annual installments every April 30 and pays annual interest based on the outstanding balance starting on April 30, 2021. The prevailing market rate of interest for a note of this type is 9%.
As of December 31, 2021, how much must be presented as part of current liabilities in the Statement of Financial Position of ABC Corporation? (For present value factors, do not round off)
2. On January 1, 2020, EMZ Corporation issued a 5-year, 10%, 1,000 of the P 5,000 face value bonds with a yield of 12%. The bonds is payable after five years and interests is payable annually starting December 31, 2020.
How much is the carrying value of the bonds as of December 31, 2022? (For present value factors, do not round off)
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