What is the acquired cost of the equipment on April 15?? General accounting Silver Corp. purchased equipment from Thompson Co. onApril 15. Silver paid Thompson $15,000 cash and signed a$90,000 noninterest-bearing note payable, due in four years.Silver recorded a $21,360 discount on notes payable relatedto this transaction. What is the acquired cost of theequipment on April 15?A) $68,640B) $83,640C) $90,000D) $105,000

Step 1: Definition of Acquired CostThe acquired cost of an asset refers to the total cost incurred…

Answered: Silver Corp. purchased equipment from…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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UMPI Corporation purchased conveyor equipment with a list price of $15,000. Presented below are three independent cases related to the equipment. (Round to the nearest dollar.) Instructions: Prepare the general journal entries required to record the acquisition and payment in each of the independent cases below. 6.1 UMPI paid cash for the equipment 8 days after the purchase. The vendor’s credit terms are 2/10, n/30. Assume that equipment purchases are initially recorded gross. 6.2 UMPI traded in equipment with a book value of $2,000 (initial cost $8,000), and paid $8,500 in cash. The old equipment could have been sold for $1,400 at the date of trade. (The exchange did have commercial substance.) 6.3 UMPI signed an interest-bearing note for the equipment on the date of purchase. The note was due in one year and was paid on time.
Tyrell Company entered into the following transactions involving short-term liabilities. Year 1 April 20 Purchased $37,500 of merchandise on credit from Locust, terms n/30. May 19 Replaced the April 20 account payable to Locust with a 90-day, 8 %, $35,000 note payable along with paying $2,500 in cash. July 8 Borrowed $57,000 cash from NBR Bank by signing a 120-day, 11%, $57,000 note payable. _?Paid the amount due on the note to Locust at the maturity date. Paid the amount due on the note to NBR Bank at the maturity date. November 28 Borrowed $24,000 cash from Fargo Bank by signing a 60-day, 9%, $24,000 note payable. December 31 Recorded an adjusting entry for accrued interest on the note to Fargo Bank. Year 2 _?_ Paid the amount due on the note to Fargo Bank at the maturity date. 5. Prepare journal entries for all the preceding transactions and events. Note: Do not round your intermediate calculations. View transaction list < Journal entry worksheet 1 2 3 4 5 6 7 8 Purchased $37,500 of…
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Tyrell Co. entered into the following transactions involving short-term liabilities. Year 1 Apr. 20 Purchased $40,250 of merchandise on credit from Locust, terms n∕30. May 19 Replaced the April 20 account payable to Locust with a 90-day, 10%, $35,000 note payable along with paying $5,250 in cash. July 8 Borrowed $80,000 cash from NBR Bank by signing a 120-day, 9%, $80,000 note payable. ___?___ Paid the amount due on the note to Locust at the maturity date. ___?___ Paid the amount due on the note to NBR Bank at the maturity date. Nov. 28 Borrowed $42,000 cash from Fargo Bank by signing a 60-day, 8%, $42,000 note payable. Dec. 31 Recorded an adjusting entry for accrued interest on the note to Fargo Bank. Year 2 ___?___ Paid the amount due on the note to Fargo Bank at the maturity date. Required 1. Determine the maturity date for each of the three notes described. 2. Determine the interest due at maturity for each of the three notes. Assume a 360-day year. 3. Determine the interest…
Splish Corporation purchased a truck by issuing an $118,400, 4-year, zero-interest-bearing note to Equinox Inc. The market rate of interest for obligations of this nature is 10%. Prepare the journal entry to record the purchase of this truck. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to O decimal places, e.g. 5,275. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Debit Credit
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Required information [The following information applies to the questions displayed below.] Tyrell Company entered into the following transactions involving short-term liabilities. Year 1 April 20 Purchased $40,250 of merchandise on credit from Locust, terms n/30. May 19 Replaced the April 20 account payable to Locust with a 90-day, 10%, $35,000 note payable along with paying $5,250 in cash. July 8 Borrowed $80,000 cash from NBR Bank by signing a 120-day, 9%, $80,000 note payable. Paid the amount due on the note to Locust at the maturity date. Paid the amount due on the note to NBR Bank at the maturity date. November 28 Borrowed $42,000 cash from Fargo Bank by signing a 60-day, 88, $42,000 note payable. December 31 Recorded an adjusting entry for accrued interest on the note to Fargo Bank. Year 2 ? Paid the amount due on the note to Fargo Bank at the maturity date. 4. Determine the interest expense recorded in Year 2. Note: Do not round your Intermediate calculations. Use 360 days a…
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Sheridan Corporation purchased a truck by issuing an $91,200, 4-year, zero-interest-bearing note to Equinox Inc. The market rate of interest for obligations of this nature is 10%. Prepare the journal entry to record the purchase of this truck. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to O decimal places, e.g. 5,275. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Debit Credit
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On January 1, year 1, Ontario Company sold a new machine to Canada Company for $70,000. Canada Company made a cash down payment of $20,000 and signed a $50,000, S percent note for the balance due. The note is payable in three equal instalments due on December 31, year 1, year 2, and year 3. Each payment includes principal plus interest on the unpaid balance. Canada Company recorded the purchase as follows: Date January 1, year I December 31, year I January 1, year I Machinery Cash Note payable Required (show computations and round to the nearest dollar): 1. What is the amount of the equal annual payments that Canada Company must make? 2. What is the total interest on the note over the three years? 3. Complete the following debt payment schedule: December 31, year 2 December 31, year 3 Total 70,000 20,000 50,000 4. Prepare the journal entries for each of the three payments. 5. Explain why interest expense decreased in amount each year. Debt Payment Schedule Cash Payment Interest Expense…

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