Sweet Acacia Limited owes $240,000 to Marin Inc, on a 10-year, 12% note due on December 31, 2023. The note was issued at par. Because Sweet Acacia is in financial trouble, Marin agrees to extend the maturity date to December 31, 2025, reduce the principal to $200,000, and reduce the interest rate to 5%, payable annually on December 31. The market rate is currently 5%. Sweet Acacia prepares financial statements in accordance with IFS. Using (1) factor tables, (2) a financial calculator, or (3) Excel function PV, prepare the journal entries on Sweet Acacia's books on December 31, 2023, 2024, and 2025. (Hint: Refer to Chapter 3 for tips on calculating.) (Round present value factor calculations to 5
Sweet Acacia Limited owes $240,000 to Marin Inc, on a 10-year, 12% note due on December 31, 2023. The note was issued at par. Because Sweet Acacia is in financial trouble, Marin agrees to extend the maturity date to December 31, 2025, reduce the principal to $200,000, and reduce the interest rate to 5%, payable annually on December 31. The market rate is currently 5%. Sweet Acacia prepares financial statements in accordance with IFS. Using (1) factor tables, (2) a financial calculator, or (3) Excel function PV, prepare the journal entries on Sweet Acacia's books on December 31, 2023, 2024, and 2025. (Hint: Refer to Chapter 3 for tips on calculating.) (Round present value factor calculations to 5
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Ex.12.
Transcribed Image Text:Sweet Acacia Limited owes $240,000 to Marin Inc, on a 10-year, 12% note due on December 31, 2023. The note was issued at par.
Because Sweet Acacia is in financial trouble, Marin agrees to extend the maturity date to December 31, 2025, reduce the principal to $200,000, and reduce the
interest rate to 5%, payable annually on December 31. The market rate is currently 5%. Sweet Acacia prepares financial statements in accordance with IFS.
Using (1) factor tables, (2) a financial calculator, or (3) Excel function PV, prepare the journal entries on Sweet Acacia's books on December 31, 2023, 2024, and
2025. (Hint: Refer to Chapter 3 for tips on calculating.) (Round present value factor calculations to 5
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