PROBLEM 4On January 1, 2020, ABC Company sold a piece of land for P10,000,000. The company received a 10%, P10,000,000 note payable onDecember 31, 2029. The interest is payable every December 31. The land was purchased for P1,750,000. The prevailing marketinterest rate for similar notes is 12%.How much is the carrying value as of December 31, 2027?

The current value of the note is the present value of all the cash inflows received on the note…

Answered: PROBLEM 4 On January 1, 2020, ABC…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA3: Time Value Of Money

Section: Chapter Questions

Problem 16E

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(Appendix 14.1)Pamlico Company has a 500,000, 15%, 3-year note dated January 1, 2019, payable to Forest National Bank. On December 31, 2020, the bank agreed to settle the note and unpaid interest of 75,000 for 50,000 cash and marketable securities having a current market value of 375,000. Pamlicos acquisition cost of the securities is 385,000. Ignoring income taxes, what amount should Pamlico report as a gain from the debt restructuring on its 2020 income statement? a. 65,000 b. 75,000 c. 140,000 d. 150,000
What is the interest income for 2022? What is the carrying value of the notes receivable on December 31. 2022?
Problem 13 On January 1, 2020, Magbaril Company sold equipment with a carrying amount of P800,000 to Macud Company. As payment, Macud gave Magbaril Company a P1,200,000 note. The note bears an interest rate of 5% and is to be repaid in three annual installments of P400,000 (plus interest on the outstanding balance). The first payment was received on December 31, 2020. The prevailing rate of interest for a note of this type at January 1 was 10% and 9% on December 31. The gain on sale of equipment is The interest income to be recognized in 2021 is
4. What is the carrying amount of the note as of December 31, 2022?
On January 1, 2020, ABC Company sold a piece of land for P10,000,000.The company received a 10%, P10,000,000 note payable on December31, 2029. The interest is payable every December 31. The land waspurchased for P1,750,000. The prevailing market interest rate for similarnotes is 12%.How much is the carrying value as of December 31, 2027?
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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?
What is the interest income for 2022? Based on preceding data, what is the carrying value of the note receivable on December 31, 2022?
16. On 1 January 2022, Marina Tower exchanged equipment for an $800,000 zero-interest-bearing note due on January 1, 2023. The prevailing rate of interest for a note of this type at January 1, 2020 was 10%. The present value of $1 at 10% for three periods is 0.75. What amount of interest revenue should be included in Marina's 2023 income statement?Question 16Answera.$60,000b.$66,000c.$0d.$80,000. please answer do not image format
PROBLEM:On October 1, 2021, Chrysanthemum Co. purchased equipment by issuing a four-year, 9% promissory note with face value of P1,500,000. The note is payable in four equal annual installments of P375,000 plus accrued interest on the unpaid balance every September 30 starting September 30, 2022. What is the carrying value of the note on December 31, 2023?* 750,000 1,500,000 766,875 842,812.50 What amount shall be reported as interest payable on December 31, 2022?* 101,250 25,312.50 126,562.50 Zero How much is the interest expense for the year 2023?* 92,812.50 16,875 101,250 67,500 How much is the interest expense for the year 2022?* 25,312.50 126,562.50 101,250 135,000
Please answer do not image format
10. On January 1, 2020, ABC Co. sold a transportation equipment with a historical cost of P1,000,000 and accumulated depreciation of P300,000 in exchange for cash of P100,000 and a noninterest-bearing note receivable of P800,000 due on January 1, 2023. The prevailing rate of interest for this type of note is 12%. How much is the carrying amount of the receivable on December 31, 2021?a. 800,000 b. 569,424c. 714,286d. 637,755 11. Present value isa. the value now of a future amount.b. the amount that must be invested now to produce a known future value.c. always smaller than the future value.d. all of these. 12. A higher interest rate results toa. increased amount of present value.b. decreased amount of present value.c. same amount of present value.d. Answer cannot be determined due to insufficient data PLEASE ANSWER IMMEDIATELY

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