use the calculations arrived at from the time value of places as displayed in the factor table provided and finall ed when the amount is entered. Do not indent manually nts.) tles and Explanation
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Q: ANLIZE THE ADJUSTIN
A: The entries have been prepared below.
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- On January 1, 2019, Park Company accepted a 36,000, non-interest-bearing, 3-year note from a major customer in exchange for used equipment. The equipment had originally cost Park 200,000 and had a book value of 20,000 on the date of the sale. At the 12% imputed interest rate for this type of loan, the present value of the note is 25,500 on January 1, 2019. Park uses the effective interest rate. What is the carrying value of the note receivable on Parks December 31, 2019, balance sheet? a. 28,560 b. 29,000 c. 32,500 d. 36,000Straight Industries purchased a large piece of equipment from Curvy Company on January 1, 2019. Straight Industries signed a note, agreeing to pay Curvy Company $370,000 for the equipment on December 31, 2019. The market rate of interest for similar notes was 10%. The present value of $370.000 discounted at 10% for four years was $252,715. On January 1, 2019, Straight Industries recorded the purchase with a debit to equipment for $252,715 and a credit to notes payable for $252,715. On Straight Industries' balance sheet for the year ended December 31, 2019, the book value of the liability for notes payable, including accrued interest would be closest to: Multiple Cholce $277,987. $289.715. $285,208. $287.408.Bygone Company manufactures and sells computers. On January 1, 2021, the entity sold a computer costing P400,000 for P600,000. The buyer signed a noninterest bearing note for P600,000 payable in three equal installments every December 31. The cash selling price of the computer is P540,000. Required:Prepare journal entries for the current year.
- On January 1, 2017, Oldham Company sold goods to Windall Company in exchange for a 3-year, non-interest-bearing note with a face value of $30,000. If Oldham entered into a separate financing transaction with Windall, an appropriate interest rate would be 10%; therefore, the transaction price would be $22,540. Which of the following statements is true about the journal entry that records the transaction when Oldham delivers the goods to Windall on January 1, 2017? Debit Discount on Note Receivable $7,460 Credit Sales Revenue $22,540 Credit Interest Revenue $7,460 Debit Note Receivable for $22,540On January 1, 2019, Fulton Inc. enters into a contract with Gibson to deliver goods. Gibson pays $100,000 at the time the contract is signed, at which time the goods are transferred and Fulton’s performance obligation is complete. In addition, Gibson agrees to pay Fulton $100,000 on December 31, 2019, and December 31, 2020. If Fulton entered into a financing arrangement with Gibson it would charge an interest rate of 9%. Please assist with the journal entries. Thank you! There are 8 journal entries in all.Yellow Company, a distributor of machinery, bought a machine from the manufacturer in November 2020 for P500,000. On December 30, 2020, the entity sold this machine for P750,000 under the following terms: 2% discount if paid within 30 days, 1% discount if paid after 30 days, or payabl e in full within ninetydays if not paid within the discount periods. However, the customer had the right to return this machine to Yellow Company if it was unable to resell the machine before the expiration of the ninety-day payment period, in which case the customer’s obligation to Yellow Company would be canceled. In the net sales for the year ended december 31,2020, what amount should be included for the sale of the machine? a. 750,000 b. 735,000 c. 742,500 d. 0
- Amber Mining and Milling, Inc., contracted with Truax Corporation to have constructed a custom-made lathe. The machine was completed and ready for use on January 1, 2021. Amber paid for the lathe by issuing a $600,000, threeyear note that specified 4% interest, payable annually on December 31 of each year. The cash market price of the lathe was unknown. It was determined by comparison with similar transactions that 12% was a reasonable rate of interest.Required:1. Prepare the journal entry on January 1, 2021, for Amber Mining and Milling’s purchase of the lathe.2. Prepare an amortization schedule for the three-year term of the note.3. Prepare the journal entries to record (a) interest for each of the three years and (b) payment of the note at maturity.Holly Springs, Incorporated contracted with Coldwater Corporation to have constructed a custom-made lathe. The machine was completed and ready for use on January 1, 2024. Holly Springs paid for the lathe by issuing a $300,000 note due in three years. Interest, specified at 2%, was payable annually on December 31 of each year. The cash market price of the lathe was unknown. It was determined by comparison with similar transactions for which 6% was a reasonable rate of interest. Holly Springs uses the effective interest method of amortization. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required:1.Prepare the journal entry on January 1, 2024, for Holly Springs’ purchase of the lathe. 2.Prepare an amortization schedule for the three-year term of the note. 3.Prepare the journal entries to record (a) interest for each of the three years and (b) payment of the note at maturity.Hogg Company purchased a machine from Chump Corporation on October 31, 2020. In payment for the $570,000 purchase, Hogg issued a one-year installment note to be paid in equal monthly payments of $50,664 at the end of each month. The payments include interest at the rate of 12%. The amount of interest expense that Hogg will report in its income statement for the year ended December 31, 2020, is: O $10,950 O $5,064 O $5,700 $11,520
- Holly Springs, Incorporated contracted with Coldwater Corporation to have constructed a custom-made lathe. The machine was completed and ready for use on January 1, 2024. Holly Springs paid for the lathe by issuing a $330,000 note due in three years. Interest, specified at 2%, was payable annually on December 31 of each year. The cash market price of the lathe was unknown. It was determined by comparison with similar transactions for which 6% was a reasonable rate of interest. Holly Springs uses the effective interest method of amortization. Note: Use tables, Excel, or a financial calculator. (FV of $1. PV of $1. FVA of $1. PVA of $1, FVAD of $1 and PVAD of $1) Required: 1. Prepare the journal entry on January 1, 2024, for Holly Springs' purchase of the lathe. 2. Prepare an amortization schedule for the three-year term of the note. 3. Prepare the journal entries to record (a) interest for each of the three years and (b) payment of the note at maturity. Complete this question by…Holly Springs, Incorporated contracted with Coldwater Corporation to have constructed a custom-made lathe. The machine was completed and ready for use on January 1, 2024. Holly Springs paid for the lathe by issuing a $330,000 note due in three years. Interest, specified at 2%, was payable annually on December 31 of each year. The cash market price of the lathe was unknown. It was determined by comparison with similar transactions for which 6% was a reasonable rate of interest. Holly Springs uses the effective interest method of amortization. Note: Use tables, Excel, or a financial calculator. (FV of $1. PV of $1. FVA of $1. PVA of $1, FVAD of $1 and PVAD of $1) Required: 1. Prepare the journal entry on January 1, 2024, for Holly Springs' purchase of the lathe. 2. Prepare an amortization schedule for the three-year term of the note. 3. Prepare the journal entries to record (a) interest for each of the three years and (b) payment of the note at maturity. Complete this question by…At the beginning of 2018, VHF Industries acquired a machine with a fair value of $6,074,700 by issuing a fouryear, noninterest-bearing note in the face amount of $8 million. The note is payable in four annual installmentsof $2 million at the end of each year.Required:1. What is the effective rate of interest implicit in the agreement?2. Prepare the journal entry to record the purchase of the machine.3. Prepare the journal entry to record the first installment payment at December 31, 2018.4. Prepare the journal entry to record the second installment payment at December 31, 2019.5. Suppose the market value of the machine was unknown at the time of purchase, but the market rate of interestfor notes of similar risk was 11%. Prepare the journal entry to record the purchase of the machine.