On September 1, Year 1, Laredo Company purchased equipment making a down payment of $15,500 cash and signing a one year note payable on the $22,500 balance. The note carried an interest rate of 6%, and all interest was to be paid on the mat date. Which of the following correctly shows the combined effect of the purchase as well as the accrual of interest on Decem 31, Year 1? Net Income (450) ΝΑ (450) (450) None of the above Operating (450) (450) ΝΑ ΝΑ Cash Flows Investing (15,500) NA (15,500) (15,500) Financing ΝΑ 22,500 22,500 ΝΑ
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- On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10% interest rate. Each annual payment is in the amount of $39,569 and payment is due each Dec. 31. What is the journal entry on Jan. 1 to record the cash received and on Dec. 31 to record the annual payment? (You will need to prepare the first row in the amortization table to determine the amounts.)Madison Company issued an interest-bearing note payable with a face amount of $25,800 and a stated interest rate of 8s to the Metropolitan Bark on August 1, Year 1. The note carried a one year term. Based on this information alone, the amount of total liablities appearing on Madisoris Year 1 balance sheet would be Select one O A $25,800 OB $27864 OC $26,660 OD $27,004 Denver Co. issued bonds with a face value of $79,000 and a stated interest rate of 7% The bonds have a life of five years and were sold at 103.50. If Denver amortizes discounts and premiums using the straight ine method, the amount of interest expense each full year would be Select one O A S6083. OB. $5530. OC S4977. OD $5724. Victor Company issued bonds with a $400,000 face value and a 3% stated rate of interest on January 1, Year 1. The bonds carried a Syear term and sold for 93. Victor uses the straight-line method of amortization. Interest is payable on December 31 of each year. The carrying value of the bond…On September 1, 20X1, Chabon Corp. purchased machinery costing $20,000 by issuing a 12-month, 12%, promissory note to the seller. The note's principal plus interest will be paid when the note matures on September 1, 20X2. Interest calculations are rounded to the nearest whole month. Required: Record the September 1, 20X1 transaction, the year-end adjustment for interest, and the loan repayment on September 1, 20X2.
- on January 1, year 1, mill co exchanged equipment for a 200,000, non interest bearing note due on January 1, year 3. the prevailing rate of interest for a note of this type at January 1, year 1, was 10%. what amount of interest revenue should be included in mills year 2 income statement choose the closest oneOn January 1 of Year 1, Bryson Company obtained a $147,750, 4-year, 7% installment note from Campbell Bank. The note requires annual payments of $43,620, beginning on December 31 of Year 1. Question Content Area a. Prepare a table for this installment note, similar to the one presented in Exhibit 4. Enter all amounts as positive numbers. (Note: Due to rounding, the Year 4 Interest expense is provided.) Round the computation of the interest expense to the nearest whole dollar. If an amount box does not require an entry, leave it blank. b. Journalize the entries for the issuance of the note and the four annual note payments. If an amount box does not require an entry, leave it blank.On June 1, Davis Inc. issued an $76,100, 12%, 120-day note payable to Garcia Company Assume that the fiscal year of Garcia ends June 30. Using a 360-day year in your calculations, what is the amount of interest revenue recognized by Garcia in the following year? When required, round your answer to the nearest dollar. a.$1,522 b.$9,132 c.$761 d.$2,308
- On September 1, Year 1, Able Company purchased a building from Regal Corporation by paying $ 380,000 cash and issuing a one- year note payable for the balance of the purchase price. Interest on the note is stated at an annual rate of 12% and is paid at maturity. In its December 31, Year 1, balance sheet, Able correctly presented the note and interest payable as follows: Interest payable $15, 200 Notes payable, 12%, due September 1, Year 2 $380,000 What is the amount of the interest expense Able will recognize on this note in Year 2? Multiple Choice $15,200 $26, 600 $ 30,400 $45,600On June 1, Davis Inc. issued an $89,300, 8%, 120-day note payable to Garcia Company. Assume that the fiscal year of Garcia ends June 30. Using a 360-day year, what is the amount of interest revenue recognized by Garcia in the following year? When required, round your answer to the nearest dollar. a. $1,806 Ob. $7,144 O c. $595 Od. $1,191 BOn July 1, Alton Co. issued an $74,700, 10%, 120-day note payable to Seller Co. Assume that the fiscal year of Alton Co. ends July 31. Using a 360-day year in your calculations, what is the amount of interest expense recognized by Alton in the current fiscal year? When required, round your answer to the nearest dollar. Select the correct answer. a-$1,246 b-$1,869 c-$7,470 d-$623
- On August 1, Year 1, Hernandez Company loaned $58,800 cash to Acosta Company. The one-year note carried a 5% rate of Interest. Which of the following shows how the December 31, Year 1, recognition of accrued Interest will affect Hernandez's financial statements? Assets A. $ 1,715 = B. $ 1,715 = C. $ 1,225 D. $ 1,225 = Multiple Choice O Balance Sheet = Liabilities + ΝΑ + ΝΑ + ΝΑ O O Option A Option B Option C Option D ΝΑ Income Statement Expenses = ΝΑ NA Equity Revenues $1,715 $ 1,715 - $1,715 $ 1,715 - $ 1,225 $1,225 - $1,225 + + $1,225 ΝΑ NA = = = = Net Income $ 1,715 $ 1,715 $ 1,225 $ 1,225 Statement of Cash Flows $ 1,715 OA ΝΑ $ 1,225 OA NAOn January 1, year 8 Harper Co. 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 Co. 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 8.10782On June 1, Davis Inc. issued an $84,000, 5%, 120-day note payable to Garcia Company. Assume that the fiscal year of Garcia ends June 30. Using the 360-day year, what is the amount of interest revenue (rounded) recognized by Garcia in the following year? a.$4,200 b.$1,600 c.$700 d.$1,050