On September 30, 2021, Coronado Corporation received a three-year, 12%, $1,750,000 bank loan. The terms provide for payment ofthe bank loan with quarterly instalment payments of $175,809, starting on December 31. Coronado has a November 30 year end andrecords adjusting entries annually. Record the first two instalment payments, on December 31, 2021, and March 31, 2022. (Round answers to the nearest wholedollar, e.g. 5,250. Credit account titles are automatically indented when the amount is entered. Do not indent manually.List all debit entries before credit entries.)DateAccount Titles and ExplanationDebitCreditDec. 31,Interest Payable34,0002021Interest ExpenseBank Loan Payable175,809Cash1,802,500Mar. 31,Interest Expense52742022Bank Loan Payable165,261Cash170,535

On September 30, 2021, Coronado Corporation received a three-year, 12%, $1,750,000 bank loan. The terms provide for payment of the bank loan with quarterly instalment payments of $175,809, starting on December 31. Coronado has a November 30 year end and records adjusting entries annually.

On September 30, 2021, Coronado Corporation received a three-year, 12%, $1,750,000 bank loan. The terms provide for payment of the bank loan with quarterly instalment payments of $175,809, starting on December 31. Coronado has a November 30 year end and records adjusting entries annually.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Samco signed a 9-year note payable on January 1, 2025, of $540,000. The note requires annual…

A: Detailed explanation:Face value of the note $ 540,000 , interest rate 6% , issued January 1, 2025…

Q: On November 12, 2021, Jones Corporation borrows money at James National Bank by issuing a $10,000, 3…

A: Effective annual interest rate = Interest / ( Proceeds x Time ) Given that: Discounted = 12% Basis…

Q: Mermaid Bank granted a loan to a borrower on January 1, 2020. The interest on the loan is 12%…

A: CARRYING VALUE It refers to the worth of an asset or a debt at the time it was purchased. Carrying…

Q: On January 1, 2021, Monster Corporation borrowed $9 million from a local bank to construct a new…

A: Amortization schedule: It can be defined as a table that shows the expense of interest, repayment of…

Q: On January 1, 2021, Cullumber Corp. borrows $9,000 by signing a 3-year, 3% note payable. The note is…

A: Period Cash payment Interest expense at 3% Reduction of principal Principal balance Jan 1, 2021…

Q: On January 1, Year 1, Beatie Company borrowed $400,000 cash from Central Bank by issuing a…

A: Amortization schedule of interest and principal payment for 5 periods is as under:

Q: On January 1, 2021, Tropical Paradise borrows $37,000 by agreeing to a 6%, six-year note with the…

A: INTRODUCTION: An installment note is a legal obligation or responsibility that compels the borrower…

Q: Wildhorse Co. issued a five-year interest-bearing note payable for $324000 on January 1, 2019. Each…

A: Balance sheet is the financial statement which involves the total debt, liabilities, assets and…

Q: On May 1, 2020, Christina Fashions borrowed $106,000 at a bank by signing a four-year, 6% loan. The…

A: Interest payable is a liability any individual or company owes for the obligation to be repaid. It…

Q: On November 1, 2019, Norwood borrows $410,000 cash from a bank by signing a five-year installment…

A: To make an amortization table, we have to provide for 9% interest each year on the Principal amount…

Q: A Company issues four-year bonds with a $114,000 par value on January 1, 2021, at a price of…

A: Interest expense = 114000 x 5% x 6/12 = 2850 bond amortisation = (114000-109870)/8 = 516.25

Q: What amount of the payment made on January 1, 2022 will be interest expense?

A: Amount Borrowed = $360000 Interest Rate = 4% Fixed Annual Payment = $32379 Interest to be paid on…

Q: On November 1, 2019, Norwood borrows $200,000 cash from a bank by signing a five-year installment…

A: Amortization schedule of loan: It can be defined as a table that shows the expense of interest,…

Q: For Atco Finance, record (1) the payment of the $216,000 cash and the receipt of the note receivable…

A: A company may borrow money from another company by signing a note. A note can be long-term or…

Q: On November 1, 2019, Norwood borrows $410,000 cash from a bank by signing a five-year installment…

A: Journal entry is a primary entry that records the financial transactions initially.

Q: On December 31, 2019, Carrboro Textile Company hard short-term debt in the form of notes payable…

A: Here, the company has refinanced the short term debt by entering into an agreement with worldwide…

Q: The following selected transactions relate to liabilities of United Insulation Corporation. United’s…

A: Journal entries indicate the format that records the day to day business related to monitory…

Q: On January 1, 2018, King Inc. borrowed $190,000 and signed a 4-year, note payable with a 10%…

A: The journal entries are prepared to keep the record of day to day transactions of the business.

Q: On August 1, 2021, Trico Technologies, an aeronautic electronics company, borrows $21 million cash…

A: Given information is: On August 1, 2021, Trico Technologies, an aeronautic electronics company,…

Q: en Company borrowed $150,000 from Lyon Country Bank. The terms of the loan agreement specified 4…

A: Liability -The term "liability" refers to any type of debt that a company has to a person or another…

Q: Metlock Co. receives $380,000 when it issues a $380,000, 15%, mortgage note payable to finance the…

A: To calculate the remaining balance of the mortgage note payable for Metlock Co. as of December 31,…

Q: Prepare the appropriate journal entries through the maturity of each liability. (If no entry is…

A: Journal entries refer to the first step of accounting where economic events of the enterprise are…

Q: On January 1, 2021, Diggs Co. lends some money in exchange for a 10% $100,000 10-year note. The…

A: a)Coupon Rate =10%Market rate=8%The coupon rate is more than the Market rate i.e. It is issued at a…

Q: revenue has been recognized in 2021 in connection with the loan. What is the loan impairment loss on…

A: Impairment means a sudden reduction in the asset value that a company has which can be fixed or…

Q: Jones Company signed a 5-year note payable on January 1, 2020, of $100,000. The note requires annual…

A: Interest = Principal Balance x Rate x Time

Q: On June 2021, A Corporation loaned $1,000,000 from a bank, payable in 10 equal instalments. The…

A: A liabilities account in balance sheet is classified as current liabilities when such obligation is…

Q: On January 1, 2018, King Inc. borrowed $190,000 and signed a 5-year, note payable with a 10%…

A: Note payable: The person borrows an amount and issue a note to the lender that he will pay the…

Q: Sammy Company, a calendar-year company, has a 6% note receivable dated November 1, 2020 in the…

A: Answer) In the given question, the company had note receivable of P 3,000,000 on November 1, 2020…

Q: Showtime, Inc. borrows $160,000 by issuing an 8%, 5-year note on January 1, 2020. Showcase must…

A: Journal entries used to record accounting transactions in chronological order under double entry…

Q: On January 2, 2018, Keystone Company borrowed $60,000 from Bank Three. The loan was to be repaid in…

A: Solution: Total borrowings = $60,000 Annual payments = $10,000 Balance borrowings at Dec, 31, 2019 =…

Q: Cucina Corporation signed a new installment note on January 1, 2021, and deposited the proceeds of…

A: The process of recording business transactions in the books of accounts for the first time is…

Q: On January 1, 2018, Nantucket Ferry borrowed $14,000,000 cash from BankOne and issued a…

A: Interest on Note = Principal amount x rate of interest x time = $14,000,000 x 6% x 1 years =…

Q: Upon January 1, 2020, Sally Corp. borrowed $360,000 from County Bank and signed a 15-year note…

A: It is simply a fee levied against the borrower for the use of an asset. Borrowed assets might…

Q: On January 1,2021, Eagle Company borrows $100,000 cash by signing a four-year, 7% installment note.…

A: An amortization schedule is a chart that shows the regular payments on a mortgage over time. The…

Q: On January 1, 2021, CPS Co. borrowed $340,000 cash from iLend and issued a five-year $340,000, 4%…

A: Interest Expense: The cost of debt which is incurred during a particular accounting period is called…

Q: DBC Company has received a confirmation letter from the First National Bank of Miami (FNBM) about a…

A: 1) Prepare a table calculating average used balance, interest rate applicable, interest on unused…

Q: On July 1, 2020 Walker Inc. signed a $600,000, 15 month, 10% note payable. At due date, the…

A: This is based on bill of exchange, in the given case since note is payable in 15 months and the same…

Q: On February 10, 2021, after issuance of its financial statements for 2020, Sunland Company entered…

A: Debt obligation represents the money owed by one entity to another party obtained by the former for…

Q: On July 1, 2020, Thomas Company, which follows calendar year accounting, issued $240.000 note to be…

A: Long -term debt- Long term debt refers to the liability which is repaid after 12months or more.…

Q: The journal entry on December 31 would consist of a debit to Notes Payable for $10,000, debit to…

A: Notes payable: Notes payable can be defined as the promissory note in which one party promises other…

Q: On January 1, 2018, King Inc. borrowed $190,000 and signed a 5- year, note payable with a 10%…

A: The journal entries are prepared to keep the record of day to day transactions of the business.

Q: Tolino Company signed a 5-year note payable on January 1, 2020, of $200,000. The note requires…

A: Notes Payable is an instrument issued by the borrower to the payee. A promissory note that carries a…

Q: On January 1, 2019, Brooks, Inc. borrows $90,000 from a bank and signs a 5% installment note…

A: Amount Borrowed: $90,000 Interest rate : 5% per annum

Q: On January 1, 2021, Banco de Oro made a 1,000,000 8% loan with interest receivable at the end of…

A: Principal Repayment- A principal payment is an imbursement that goes toward the reimbursement of the…

Q: Greener Pastures Corporation borrowed $1,950,000 on November 1, 2021. The note carried a 9 percent…

A: Accounting equation is the basic equation used to show the business transactions in the books. The…

Q: he following selected transactions relate to liabilities of United Insulation Corporation. United's…

A: A journal is a chronological record of accounting transaction showing the names of the accounts that…

Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

Question

On September 30, 2021, Coronado Corporation received a three-year, 12%, $1,750,000 bank loan. The terms provide for payment of
the bank loan with quarterly instalment payments of $175,809, starting on December 31. Coronado has a November 30 year end and
records adjusting entries annually.

Record the first two instalment payments, on December 31, 2021, and March 31, 2022. (Round answers to the nearest whole
dollar, e.g. 5,250. Credit account titles are automatically indented when the amount is entered. Do not indent manually.
List all debit entries before credit entries.)
Date
Account Titles and Explanation
Debit
Credit
Dec. 31,
Interest Payable
34,000
2021
Interest Expense
Bank Loan Payable
175,809
Cash
1,802,500
Mar. 31,
Interest Expense
5274
2022
Bank Loan Payable
165,261
Cash
170,535

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

On January 1, 2019, Eagle Company borrows $100,000 cash by signing a four-year, 7% installment note. The note requires four equal payments of $29,523, consisting of accrued interest and principal on December 31 of each year from 2019 through 2022. Prepare an amortization table for this installment note
On January 1, 2021, Eagle Company borrows $26,000 cash by signing a four-year, 8% installment note. The note requires four equal payments of $7,850, consisting of accrued interest and principal on December 31 of each year from 2021 through 2024. Prepare the journal entries for Eagle to record the note's issuance and each of the four payments. Note: Round your intermediate calculations and final answers to the nearest dollar amount.
On January 1, 2018, Company B borrowed 50,000 signing a 3-year installment note payable with yearly cash payments of $19,402 due each December Assuming the interest rate is 8%, what is the net note payable reported on the December 31 balance sheet after the annual payment?
Mewto Bank granted a loan to Mew Company on January 1, 2020. The interest on the loan is 12% payable annually starting December 31, 2020. The loan matures in four years. Principal amount P5,000,000 Direct origination cost incurred 120,000 Indirect origination cost incurred 50,000 Origination fee received from the borrower 400,000 After considering the origination fee received from the borrower and the direct origination cost incurred, the effective rate on the loan is 14%. How much is the interest income to be recognized on December 31, 2021?
Flounder, Inc. issued a $115,000, 4-year, 12% note at face value to Flint Hills Bank on January 1, 2025, and received $115,000 cash. The note requires annual interest payments each December 31. Prepare Flounder's journal entries to record (a) the issuance of the note and (b) the December 31 interest payment.
The following selected transactions relate to liabilities of Colorado Adventures. Colorado's fiscal year ends on December 31. January 13 Negotiate a revolving credit agreement with First Bank that can be renewed annually upon bank approval. The amount available under the line of credit is $10 million at the bank's prime rate. February 1 Arrange a three-month bank loan of $3.8 million with First Bank under the line of credit agreement. Interest at the prime rate of 7% is payable at maturity. May 1 Pay the 7% note at maturity. Required: Record the appropriate entries, if any, on January 13, February 1, and May 1. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions (i.e. 5 million should be entered as 5,000,000).)
On January 1, 2021, Tropical Paradise borrows $33,000 by agreeing to a 6%, four-year note with the bank. The funds will be used to purchase a new BMW convertible for use in promoting resort properties to potential customers. Loan payments of $775.01 are due at the end of each month with the first installment due on January 31, 2021. Record the issuance of the installment note payable and the first two monthly payments. (Do not round intermediate calculations. Round your final answers to 2 decimal places. If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
Campus Flights takes out a bank loan in the amount of $200,500 on March 1, 2019. The terms of the loan include a repayment of principal in ten equal installments, paid annually from March 1. The annual interest rate on the loan is 8%, recognized on December 31, the fiscal year-end date. The interest recognized for the first payment date as of December 31, 2019 is $13,267. The interest recognized for the year 2020 as of the first payment date is $16,040. The principal due on the first payment date, March 1, 2020 is $186,659. 1. Compute the interest recognized for the second payment date as of December 31, 2020. _______________ 2. Compute the total interest for the year 2020. __________ IMPORTANT: Please count your months carefully as the note's "year" crosses between two fiscal years.
On January 1, 2021, Nantucket Ferry borrowed $14,600,000 cash from BankOne and issued a four-year, $14,600,000, 8% note. Interest was payable annually on December 31. Prepare the journal entries for both firms to record interest at December 31, 2021.
Magnolia Corp. granted a loan to a borrower on January 1, 2023. The interest on the loan is 12% payable annually starting December 31, 2023. The loan matures in three years on December 31, 2025. Data related to the loan are: Principal amount10,000,000Origination fees charged against the borrower470,560Direct origination cost incurred235,000 1. The carrying amount of the loan as of January 1, 2023 is A. 9,529,440 B. 9,764,440 C. 10,235,000 D. 10,235,560 2. The carrying amount of the loan as of December 31, 2023 is A. 9,833,817 B. 9,912,213 C. 10,000,00 D. 10,235,560 3. The current portion of the note on December 31, 2023 is A. Nil B. 78,396 C. 9,833,817 D. 9,912,213 4. The noncurrent portion of the note on December 31, 2023 is A. Nil B. 9,833,817 C. 9,912,213 D. 10,000,000
On January 1, 2021, Eagle Company borrows $29,000 cash by signing a four-year, 5% installment note. The note requires four equal payments of $8,178, consisting of accrued interest and principal on December 31 of each year from 2021 through 2024.
MNO Bank granted a loan to a borrower on January 1, 2020. The interest on the loan is 10% payable annually starting December 31, 2020. The loan matures in three years on December 31, 2022. Additional information is as follows: Principal amount of P5,000,000; Direct origination cost incurred for P100,000; Indirect origination cost incurred for P50,000 and Origination fee received from the borrower was P340,000. After considering the origination fee received from the borrower and the direct origination cost incurred, the effective rate on the loan is 12%. Compute for the interest income for 2020.