Vaughn Co. owes $181,300 to Bramble Inc. The debt is a 10-year, 11% note. Because Vaughn Co. is in financial trouble, Bramble Inc.agrees to accept some land and cancel the entire debt. The property has a book value of $96,500 and a fair value of $129,600.a.b.Prepare the journal entry on Vaughn's books for debt restructure.Prepare the journal entry on Bramble's books for debt restructure.

Journal entry:Journal entry is a set of economic events which can be measured in monetary terms.…

Answered: Vaughn Co. owes $181,300 to Bramble…

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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6. Loan Amortization Assume that your aunt sold her house on December 31, and to help close the sale she took a second mortgage in the amount of $30,000 as part of the payment. The mortgage has a quoted (or nominal) interest rate of 12%; it calls for payments every 6 months, beginning on June 30, and is to be amortized over 10 years. Now, 1 year later, your aunt must inform the IRS and the person who bought the house about the interest that was included in the two payments made during the year. (This interest will be income to your aunt and a deduction to the buyer of the house.) To the closest cent, what is the total amount of interest that was paid during the first year? Do not round intermediate calculations. Round your answer to the nearest cent. $
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Starks products uses the cost method to account for investments in bonds. They purchased cash $150,000 of ice line inc, 6% bonds at 100 plus accrued interest of $1500. They then received a semiannual interest payment. I already have the answers for the above transactions. Journalize the following entry: sold $90,000 of the bonds at 102 plus accrued interest of $900
4. Shane obliged to pay her liability to St. Sebastian Multipurpose Cooperative amounting to 875,000.00 which she used to purchase a parcel of land. The interest for her debt is 6.2 % compounded quarterly for 3 years. Construct an amortization schedule to terminate the said obligation.
NYK, Inc.retires a $45 million bond issue when the carrying value of the bonds is $47 million, but the market value of the bonds is $45 million. The entry to record the retirement will include: Select one: a. A credit of $4 million to Gain on Bond Retirement. b. A debit of $4 million to Loss on Bond Retirement. c. No gain or loss on retirement d. A debit of $2 million to Loss on Bond Retirement e. A credit of $2 million to Gain on Bond Retirement.
Make any journal entries necessary related to contingent liabilities. See the information below: Customer litigation Red Robin was sued in November of the current year by one of its customers. Red Robin’s attorneys have confidence that they can win the case. They believe it is 80% probable that they will win the case. However, if they lose, they estimate a $35,100 payment. The attorneys anticipate that it will be several more years before this litigation is settled.
Required Informatlon [The following information applies to the questions displayed below.] Javier and Anita Sanchez purchased a home on January 1 of year 1 for $1,000,000 by paying $200,000 down and borrowing the remaining $800,000 with a 6 percent loan secured by the home. The Sanchezes made interest-only payments on the loan in years 1 and 2. (Leave no answer blank. Enter zero if applicable.) c. Assume year 1 is 2020 and by the beginning of year 4, the Sanchezes have pald down the principal amount of the loan to $500,000. In year 4, they borrow an additional $100,000 through a loan secured by the home in order to finish their basement. The new loan carries a 7 percent interest rate and is termed a "home equity loan" by the lender. What amount of interest can the Sanchezes deduct on the $100,000 loan? Maximum deductible interest expense
NYK, Inc.retires a $45 million bond issue when the carrying value of the bonds is $43 million, but the market value of the bonds is $46 million. The entry to record the retirement will include: Select one: a. A debit of $3 million to Loss on Bond Retirement. b. A credit of $1 million to Gain on Bond Retirement. c. A debit of $1 million to Loss on Bond Retirement d. No gain or loss on retirement e. A credit of $2 million to Gain on Bond Retirement.
Three years ago American Insulation Corporation issued 10%, $800,000, 10-year bonds for $770,000. American Insulation exercised its call privilege and retired the bonds for $790,000. The corporation uses the straight-line method to determine interest. Required: Prepare the journal entry to record the call of the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Crane Company leases a new building from Noble Construction, Inc. The present value of the lease payments is $625,000. The lease is a finance lease. Prepare the journal entry that the lessee should make to record this transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit

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