Sierra Corp. had beginning long-term debt of $80,000. During the year, the company paid $20,000 to the lender, of which $5,000 was interest. The company also borrowed an additional $18,000. What is the ending long-term debt?
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- SureWin Company owes an amount of debt to a bank and the bank proposed the following annual payments to pay off the debt. Year 0 (Today): 20,000 Year 1: 24,000; Year 2: 30,000; Year 3: 30,000; Year 4: 35,000; (1) If the appropriate interest rate that bank is charging is APR 6% annual compounding, what would be the amount to debt owed today? (2) If SureWin can negotiate with the bank to pay yearly equal instalments over 4 years starting from the end of year 1 with the same 6% annual interest rate, what would be the amount of yearly payment? (3) If the bank accepts SureWin proposal in (2), what would be the interest amount paid to the bank in the first year?Gingerbread Corp was issued a $250,000 loan at 8% with a five year maturity date. The partial amortization schedule prepared by the company accountant is presented below. What will the company record for interest expense in period 4? (round decimal up to the nearest whole $) Interest expense in period four ?14. Gingerbread Corp was issued a $220,000 loan at 6%. The amortization schedule created by the company accountant is presented below. How much interest will Gingerbread Corp record in interest expense over a period of 6 years?
- In PALLID’s 20x1 financial statements, how much is presented as current liability in relation to the loan payable?On 1 January 2010, Company A lends Company B the sum of $10,000 payable in 10 six-monthly instalments of $1,200 each. On 30 June 2012, after receiving payment of instalment No. 5, only 60 per cent of the amount of each remaining instalment will be received, as Company B has financial problems. If after paying instalment No. 7 on 30 June 2013, the debtor announces that it will pay instalments 8, 9 and 10 as originally due ($1,200 committed) and will also pay on 30 June 2015 the remaining $960 owed on instalments No. 6 and No. 7 (the 40% it did not pay). It is requested: a) Determine the IRR of the loan b) Make the accounting entries of the initial recognition for both companies, ‘A’ and ‘B’. c) Draw up the amortisation table in an EXCEL spreadsheet for Company ‘A’ at the time of the loan. d) Make the accounting entries as at 30 June 2012 and 30 June 2013. e) Make the accounting entry to be recognised on 30 June 2015 when Company ‘B’ pays what was announced. (f) Make all necessary…On January 1, 2014, Fabco borrowed $5,000,000 from First Bank of Newburg. The loan had a term of five years with the principal amount due at the end of the fifth year. Interest is at an annual rate of 6% with interest being paid semiannually on June 30 and December 31. In connection with the loan, the borrower incurred $84,438 of debt issuance costs that are to be amortized over the term of the loan. The effective interest method is to be used to account for the loan. Fabco was able to make the first two semiannual debt service payments, but then began to see a serious deterioration in its business. Fabco is currently in default on a number of debts and is unable to secure additional capital at market rates of interest. Based on projected cash flows, it is doubtful that the company will continue as a going concern. The company accrued the interest due on June 30, 2015, but is unable to make the interest payment. In an attempt to resolve these serious issues, Fabco received concessions…
- Gingerbread Corp was issued a $220,000 loan at 6%. The amortization schedule created by the company accountant is presented below. If Gingerbread Corp decided to pay off the entire principle balance left on the loan of $119,590 at the end of period 3 how much would the company save in interest expense? Interest expense saved ?The debt is amortized by the periodic payment shown. Compute (a) the number of payments required to amortize the debt; (b) the outstanding principal at the time indicated. Debt Principal Debt Payment Payment Interest Rate Interval Conversion Period Outstanding Principal After: $14,000 $832 3 months 12% monthly 7th payment (a) The number of payments required to amortize the debt is 24 I (Round up to the nearest integer.) (b) The outstanding principal is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)Leaf Co. has a $90,000, 9%, 10-year note issued July 31 of the current year. The debt agreement requires that Leaf maintain a total liabilities-to-equity ratio of 1.0 or less, or else the lender is able to call the debt immediately. At the end of the current year, Leaf's year-end financial statements indicate that it has a total liabilities-to-equity ratio of 1.05. a. Show how the debt is classified on the balance sheet at the current year-end. b. Assume that Leaf obtained a 6-month waiver of the debt covenant beginning this year-end from the lender. The waiver letter was dated on February 1 of the following year (before financial statements were issued). Describe how the debt is classified on the balance sheet at the current year-end. c. How would the answer to part b change (if at all), if a 15-month waiver was obtained? a. Balance Sheet, December 31 ( b. Balance Sheet, December 31 4 c. Balance Sheet, December 31 ¶ 0 0 0
- a) A bank made a 4-year 12% amortizing $2,500,000 loan with equal payments. What is the amount of interest and principal paid at the end of the 3rd year? What is the balance on the loan at the end of the 3rd year? b) Assume instead the bank demands that the borrower pay interest only for the first two years and then principal payments of $1,250,000 in years 3 and 4. What is the amount of interest and principal paid at the end of the 3rd year? What is the balance on the loan at the end of the 3rd year? Assume the same 12% rate of interest. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac).The debt is amortized by the periodic payment shown. Compute (a) the number of payments required to amortize the debt; (b) the outstanding principal at the time indicated. Debt Principal Debt Payment $17,000 $814 Payment Interval 1 month Interest Rate 8% Conversion Period quarterly Outstanding Principal After: 7th payment (a) The number of payments required to amortize the debt is (Round up to the nearest integer.) (b) The outstanding principal is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)Details for one of the loan of BB Company that is probably impaired during the period is as follows: The company made a loan of P40,000,000 to a customer with similar credit risk to BB Company on January 1, 2021. Interest is receivable on this loan at the end of each year at 2% per annum for the next five years. The loan was properly recorded and classified as amortized cost. The company made and initial assessment of the loan and the total expected credit losses over the life of the loan was P1,000,000. The discount rate applicable was at 2%. On January 1, 2021, the probability of default over the next 12 months was 5%. At December 31, 2021, there was a significant increase in the credit risk on the loan made by BB Company, the expert assessed that the total expected credit losses over the life of the loan was increase to P2,200,000. The discount rate applicable was at 2%. How much is the balance of the allowance for credit losses as of December 31, 2021?
