RED Corporation
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On July 1, 2020, RED Corporation issued a five-year note payable with a face value of ₱250,000 and a 10% interest rate. The terms of the note require RED to make five annual payments of ₱50,000 plus accrued interest, with the first payment due on June 30, 2021. With respect to the note, how much would be included in the current liabilities section of RED’s December 31,
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- On December 31, 2021, Roth Company issued a P1,000,000 face value note payable to Wake Company in exchange for services rendered to Roth. The note, made at usual trade terms, is due in nine months and bears interest, payable at maturity, at the annual rate of 3%. The market interest rate is 8%. At what amount should the note payable be reported in Roth’s December 31, 2021 balance sheet?Greener Pastures Corporation borrowed $1,750,000 on November 1, 2018. The note carried a 12 percent interest rate with the principal and interest payable on June 1, 2019. (a) The note issued on November 1. (b) The interest accrual on December 31.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. 10. At what amounts should these two notes receivable be reported in Nazareno's December 31, 2020 statement of financial position? 11. At what amounts should these two notes receivable be reported in Mudag's December 31, 2020 statement of financial position?
- LINDT Corporation manufactures and sells electrical generators. On May 31, 2020, it sold an electrical generator costing ₱ 700,000 for ₱ 1,000,000. The buyer paid ₱100,000 down and signed a ₱ 900,000 non-interest bearing note payable in three equal installments starting May 31, 2021. Assume the prevailing interest rate for a note of this type is 12%. The present value of an ordinary annuity of 1 for three periods is 2.4018. How much is the Interest income for the year ending 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 are the notes issued as of December 31,2020: a.) 10% , P 1,000,000 interest bearing note , issuance date: Jan.1,2019 ; due: December 31,2021 ( interest is payable annually) b.) 12%,P 2,500,000, interest bearing note , issuance date: Jan.1,2020 ; due: December 31,2024 (equal annual installments and interest are to be paid annually) c.) P 750,000 interest bearing note , issuance date: Jan.1,2020 ; due: December 31,2021 ( interest is payable annually) d.) 12%,P 1,500,000, interest bearing note , issuance date: Jan.1,2020 ; due: December 31,2024 (equal annual installments and interest are to be paid annually)From the above notes:- The note issued on a.) is extended for 2 more years. The company has the discretion to defer settlement of the obligation for more than 12 months.- The note issued on c.) is extended for 3 more years and this agreement was done on January 15,2021.How much should be presented as part of the current liabilities as of December 31,2020?
- Coldwell, Inc. issued a $100,000, 4-year, 10% note at face value to Flint Hills Bank on January 1, 2020, and received $100,000 cash. The note requires annual interest payments each December 31. Prepare Coldwell's journal entries to record (a) the issuance of the note and (b) the December 31 interest payment.On September 1, 2019, Silang Trading issued a note payable to Far East Bank in the amount of P500,000. The note had an interest rate of 12%and had a term of 1 year. Interest is payable upon maturity of the note. At December 31, 2019, Silang Trading should record accrued interest on the note in the amount of P60,000 P10,000 P20,000 P15,000On September 1, 2024, Daylight Donuts signed a $150,000, 8%, six-month note payable with the amount borrowed plus accrued interest due six months later on March 1, 2025. Daylight Donuts accrued interest for the note on December 31, 2024. Which of the following would be recorded on the payment of the note plus accrued interest at maturity on March 1, 2025? (Do not round your intermediate calculations.) Multiple Choice Interest Payable of $2,000 Interest Expense of $6,000 Interest Expense of $2,000 Interest Expense of $4,000
- On January 1, 2021. This Company acquired a machine by issuing a 3-year, 3%, P4,000,000 note payable. Principal is due on January 1, 2024 but interests are to be paid annually. The prevailing interest rate for this type of note is 12%. How much is the carrying amount of the note on initial recognition?On June 1, 2023, Lugaw Corp. issued a three-year interest-bearing note payable in installment in exchange of abrand-new machinery. Interest of 13% annually is payable every December 31 of each year. The principal amountof note is to be paid as follows: June 1, 2024- P350,000; June 1, 2025- P420,000; June 1, 2021- P530,000. Howmuch is the total current liabilities to be presented in the statement of financial position on December 31, 2024?On June 1, 2020, Waterway Industries loaned Carla Vista $504000 on a 11% note, payable in five annual installments of $100800 beginning January 2, 2021. In connection with this loan, Carla Vista was required to deposit $5040 in a zero-interest-bearing escrow account. The amount held in escrow is to be returned to Carla Vista after all principal and interest payments have been made. Interest on the note is payable on the first day of each month beginning July 1, 2020. Carla Vista made timely payments through November 1, 2020. On January 2, 2021, Waterway received payment of the first principal installment plus all interest due. At December 31, 2020, Waterway's interest receivable on the loan to Carla Vista should be O $0. O $14280. O $9240. O $5040.
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