Answered: Sisy Company

Business

Accounting

Sisy Company

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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P5.1B (LO 2,4,5) (Various Time Value Situations) Answer each of these unrelated questions. a. On January 1, 2025, Manatee Corporation sold a warehouse that cost $411,000 and that had accu- mulated depreciation of $163,000 on the date of sale. Manatee received as consideration a $400,000 non-interest-bearing note due on January 1, 2029. There was no established exchange price for the building, and the note had no ready market. The prevailing rate of interest for a note of this type on January 1, 2025, was 8%. At what amount should the gain from the sale of the building be reported? b. On January 1, 2025, Manatee Corporation purchased 1,000 of the $1,000 par value, 6%, 20-year bonds of Fishes Inc. The bonds mature on January 1, 2045, and pay interest annually beginning January 1, 2026. Manatee purchased the bonds to yield 8%. How much did Manatee pay for the bonds? c. Manatee Corporation bought new equipment and agreed to pay for it in five equal annual install- ments of $10,000…
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Coronado Corporation has elected to use the fair value option for one of its notes payable. The note was issued at an effective rate of 12% and has a carrying value of $13,000. At year - end, Coronado's borrowing rate (credit risk) has declined; the fair value of the note payable is now $14,600. (a) Determine the unrealized holding gain or loss on the note. (Enter loss using either a negative sign preceding the number e.g. -2,945 or parentheses e.g. (2,945).) Unrealized holding gain or loss $enter the unrealized holding gain or loss in dollars eTextbook and Media List of Accounts Attempts: 0 of 6 used (b) The parts of this question must be completed in order. This part will be available when you complete the part above.
(Note Transactions at Unrealistic Interest Rates) On July 1, 2017, Agincourt Inc. made two sales.1. It sold land having a fair value of $700,000 in exchange for a 4-year zero-interest-bearing promissory note in the face amount of $1,101,460. The land is carried on Agincourt’s books at a cost of $590,000.2. It rendered services in exchange for a 3%, 8-year promissory note having a face value of $400,000 (interest payable annually). Agincourt Inc. recently had to pay 8% interest for money that it borrowed from British National Bank. The customers in these two transactions have credit ratings that require them to borrow money at 12% interest. InstructionsRecord the two journal entries that should be recorded by Agincourt Inc. for the sales transactions above that took place on July 1, 2017.
E6.21 (LO 5) (Transfer of Receivables) Use the information for Jones Company as presented in E6.20. Jones is planning to factor some accounts receivable at the end of the year. Accounts totaling $25,000 will be transferred to Credit Factors, Inc. with recourse. Credit Factors will retain 5% of the balances for probable adjustments and assesses a finance charge of 4%. The fair value of the recourse obligation is $1,200. Instructions a. Prepare the journal entry to record the sale of the receivables.
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On January 1, Windsor, Inc. sold used equipment with a cost of $17,000 and a carrying amount of $2,300 to Swifty Corporation in exchange for a $5,100, three-year non-interest-bearing note receivable. Although no interest was specified, the market rate for a loan of that risk would be 7%. Assume that Windsor follows IFRS. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1. (a) Prepare the entry to record the sale of Windsor's equipment and receipt of the note. (Round 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.) Account Titles and Explanation Debit Credit Notes Receivable Accumulated Depreciation - Equipment Equipment 1700 Gain on Disposal of Equipment
At January 1, 2024, Clayton Hoists Incorporated owed Third BancCorp $20 million, under a 10% note due December 31, 2025. Interest was paid last on December 31, 2022. Clayton was experiencing severe financial difficulties and asked Third BancCorp to modify the terms of the debt agreement. After negotiation Third BancCorp agreed to do the following: Note: Use appropriate factor(s) from the tables provided. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) • Forgive the interest accrued for the year just ended. • Reduce the remaining two years' interest payments to $1 million each. • Reduce the principal amount to $19 million. Required: 1-3. Prepare the journal entries by Third BancCorp necessitated by the restructuring of the debt at January 1, 2024, December 31, 2024 and December 31, 2025. Note: Enter your answers in whole dollars. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final answers…