Problem 12 On December 31, 2019, Magtuba Company finished consultation services and accepted in exchange a promissory note with a face value of P300,000, a due date of December 31, 2022, and a stated rate of 5%, with interest receivable at the end of each year. The fair value of the services is not readily determinable and the note is not readily marketable. Under the drcumstances, the note is considered to have an appropriate imputed rate of interest of 10%. 13. The service revenue to be recognized for the year ended December 31, 2019 is 14. The carrying amount of the note receivable as of December 31, 2020 is

Problem 12 On December 31, 2019, Magtuba Company finished consultation services and accepted in exchange a promissory note with a face value of P300,000, a due date of December 31, 2022, and a stated rate of 5%, with interest receivable at the end of each year. The fair value of the services is not readily determinable and the note is not readily marketable. Under the drcumstances, the note is considered to have an appropriate imputed rate of interest of 10%. 13. The service revenue to be recognized for the year ended December 31, 2019 is 14. The carrying amount of the note receivable as of December 31, 2020 is

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 24E: Notes Receivable and Income On January 1, 2019, Pitt Company sold a patent to Chatham Inc. which had...

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Problem 12 On December 31, 2019, Magtuba Company finished consultation services and accepted in exchange a promissory note with a face value of P300,000, a due date of December 31, 2022, and a stated rate of 5%, with interest receivable at the end of each year. The fair value of the services is not readily determinable and the note is not readily marketable. Under the circumstances, the note is considered to have an appropriate imputed rate of interest of 10%. The service revenue to be recognized for the year ended December 31, 2019 is The carrying amount of the note receivable as of December 31, 2020 is
Problem 8:On January 1 2019, Sunrise Company is experiencing extreme financial pressure and is in default in meeting interest payment on its long term note of P6,000,000 due on December 31, 2020. The interest rate is 12% payable every December 31. The accrued interest payable on January 1, 2019 is P720,000.In the agreement with the creditor, Sunrise Company obtain the following changes in the terms of note:a. The accrued interest on January 1, 2019 is forgiven.b. The principal is reduced by P500,000.c. The new interest rate is 8% payable in every December 31.d. The new date of maturity is December 31, 2022.The present value of 1 at 12% for four period is 0.6355 and the present value of an ordinary annuity of 1 at 12% for four period is 3.0373.Required:1. Journal entry to record the modification of terms on January 1, 2019.2. Journal entry to record the interest payment and amortization of discount for 2019.___________________________________________________________________________
22. On December 31, 2020, Ebasan Company finished consultation services and accepted in exchange a promissory note with a face value of P300,000, a due date of December 31, 2023, and a stated rate of 5%, with interest receivable at the end of each year. The fair value of the services is not readily determinable and the note is not readily marketable. Under the circumstances, the note is considered to have an appropriate imputed rate of interest of 10%, The service revenue to be recognized for the year ended December 31, 2020 is A. 300,000 B. 273,953 C. 262,694 D. 247,920 23. The carrying amount of the note receivable as of December 31, 2021 is A. 300,000 B. 273,953 C. 262,694 D. 247,920
4. Discount Note On December 31, 2020, your firm provided the services to the high-end clientele and accepted in exchange a promissory note with a face value of $600,000, a due date of December 31, 2023, and a stated rate of 5%, with interest receivable at the end of each year. The note is considered to have a market rate of 10%. Required a. Prepare a schedule of note discount amortization for this note using the effective interest method b. Prepare the journal entries for the dates indicated in the schedule in part a above. c. Prepare a schedule of note discount amortization for this note using the straight-line method d. Prepare the journal entries for the dates indicated in the schedule in part c above. 5. Premium Note Your firm invested in notes issued by Grove Corporation with $2,000 par value and stated rate of 10% on Jan 1, 2018, due on Dec 31, 2020. The interest will be paid once a year on December 31. The similar notes have effective annual interest rate (market interest…
Current Attempt in Progress On January 2, 2023, Pharoah Inc. sells goods to Coronado Company in exchange for a zero-interest-bearing note with a face value of $7.920, with payment due in 12 months. The fair value of the goods at the date of sale is $7,200 (cost $4,320). Assume that the company chooses to reflect the interest component. (a)
On December 31,2021, LBJ company finished consultation services and accepted in exchange a promissory note with a face value of P200,000, a due date of December 31,2024 and a started rate of 5%, with interest receivable at the end of the each year. The fair value of the service is not readily determinable and the note is not readily marketable. Under the circumstances, the note is considered to have an appropriate imputed rate of interest of 10%. What is the amortized cost of the note on December 31,2022? P 175,131 P182,645 P190,909 P200,000
Question 4 On January 1, 2019, Madira Company loaned $216,374 to Virginia Company. A zero-interest- bearing note (face amount, $288,000) was exchanged solely for cash; no other rights or privileges were exchanged. The note is to be repaid on December 31, 2021. The prevailing rate of interest for a loan of this type is 10% . The present value of $288,000 at 10% for three years is $216,374. What is the book value (carrying amount) of the note on Virginia's balance sheet on December 31st, 2019 (round to the nearest dollar)? Question 5 The cost of issuing common stock should be reported in Accumulated Other Comprehensive Income in the balance sheet deducted from the Paid-in Capital in Excess of Par account charged to the income statement as an expense in the year the stock is issued None of these statements is correct Question 6
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17 Assume that on 15th January 2019 Mustafa and Sons LLC sold OMR 15000 goods to Ibri traders on credit. As the amount is too large, the company asked Ibri traders to give Promissory note and Ibri traders accepted to give 90 days’ promissory note by mentioning 10% annual interest. Compute maturity date and maturity value of the notes receivables. ( Assume 28 days for the month of February and 360 days in a year) a. maturity date April 17th and Cr maturity value OMR 15375 b. Maturity date April 17 and Maturity value OMR 15000 c. Maturity date May 15th and Maturity value OMR 15000 d. Maturity date April 15 and Maturity value OMR 15375
Problem 22 In its December 31, 2022 statement of financial position, Reederei Company reported receivables of P250,000 and related allowance for uncollectibility of P20,000. Such receivables are in litigation and the cost of litigation is 20% of the receivables. At December 31, 2022, it is reasonably possible that Beirut Company will not be able to collect on the receivables after litigation. What is the total amount of risk of accounting loss related to Reederei’s receivables? What is the total amount of off balance sheet risk related to Reederei’s receivables?
Problem 10 On December 31, 2020, Olaer Company received two P5,000,000 notes receivable from customers in exchanged for consulting services rendered. On both notes, interest is calculated on the outstanding principal balance at the annual rate of 4% and payable at maturity. The note from Nazareno Corporation, made under customary trade terms, is due on October 1, 2021 and the note from Mudag Corporation is due on December 31, 2025. The market interest rate for similar notes on December 31, 2020 was 10%. The compound interest factors to convert future value into present value at 10% follow: present value of 1 due in nine months, 0.93, and present value of 1 due in five years, 0.62. 1. At what amounts should these two notes receivable be reported in Nazareno’s December 31, 2020 statement of financial position? 2. At what amounts should these two notes receivable be reported in Mudag’s December 31, 2020 statement of financial position?
extreme financial pressure and is in default in meeting interest payment on its long-term note of P6,000,000 due on December 31, On December 31, 2019, Guimaras Corporation is experienc 2019. The interest rate is 10% payable every December 31. In an agreement with the creditor, Guimaras Corporation obtained the following changes in the terms of the note: The accrued interest of P600,000 on December 31, 2019 is forgiven. The new interest rate is 12%, which approximates the prevailing rate of interest for similar obligation at the time of the restructuring. The new date of maturity is December 31, 2024. What is Guimaras Corporation's gain on debt restructuring? (Round of present value factors to three decimal points) P1,032,720 P 602,400 P 151,200 P O а. b. с. d.