12-9. On January 1, 2018, the Apex Company exchanged some shares of common stock it had...
12-9. On January 1, 2018, the Apex Company exchanged some shares of common stock it had been holding as an investment for a note receivable. The note principal plus interest is due on January 1, 2019. The 2018 income statement reported $3,300 in interest revenue from this note and a $6,500 gain on sale of investment in stock. The stock's book value was $21,000. The company's fiscal year ends on December31.
Required:
1. What is the note's effective interest rate?
2. Reconstruct the journal entries to record the sale of the stock on January 1, 2018, and the adjusting entry to record interest revenue at the end of 2018. The company records adjusting entries only at year-end.
Complete this question by entering your answers in the table below.
What is the note's effective interest rate?
Effective interest rate_____________________ _____%
13-9. Complete this question by entering your answers in the spaces below.
Reconstruct the journal entries to record the sale of the stock on January 1, 2018, and the adjusting entry to record interest revenue at the end of 2018. The company records adjusting entries only at year-end. (If no entry is required for a transaction/event, type "No journal entry required in the first account field.)
Journal Entry Worksheet
Record the sale of the stock on January 1, 2018.
Date General Journal Debit Credit
January 01, 2018 __________________ _____________ _____________
14-9. Complete this question by entering your answers in the spaces below.
Reconstruct the journal entries to record the sale of the stock on January 1, 2018, and the adjusting entry to record interest revenue at the end of 2018. The company records adjusting entries only at year-end. (If no entry is required for a transaction/event, type "No journal entry required" in the first account field.)
Journal entry worksheet
Record interest revenue at the end of 2018.
Note: Enter debits before credits.
Date General Journal Debit Credit
December 31, 2018 _____________________ ______________ ______________
Homework Answers
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12-9. On January 1, 2018, the Apex Company exchanged some shares
of common stock it had...
12-9. On January 1, 2018, the Apex Company exchanged some shares of common stock it had...
12-9. On January 1, 2018, the Apex Company exchanged some shares of common stock it had been holding as an investment for a note receivable. The note principal plus interest is due on January 1, 2019. The 2018 income statement reported $3,300 in interest revenue from this note and a $6,500 gain on sale of investment in stock. The stock's book value was $21,000. The company's fiscal year ends on December 31. Required: 1. What is the note's effective interest...
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sales of $350,000, cost of goods sold of $180,000, and operating
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On January 1, 2016, Percy, Inc., acquired 70 percent of Sledge's
outstanding voting stock. At that date, $82,000 of the
acquisition-date fair value was assigned to unrecorded contracts
(with a 20-year life) and $42,000 to an undervalued building (with
a 10-year remaining life).
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On January 1, 2018, Sledge had common stock of $150,000 and retained earnings of $290,000. During that year, Sledge reported sales of $160,000, cost of goods sold of $85,000, and operating expenses of $43,000. On January 1, 2016, Percy, Inc., acquired 90 percent of Sledge's outstanding voting stock. At that date, $63,000 of the acquisition-date fair value was assigned to unrecorded contracts (with a 20-year life) and $23,000 to an undervalued building (with a 10-year remaining life). In 2017, Sledge...
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retained earnings of $480,000. During that year, Sledge reported
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expenses of $62,000.
On January 1, 2016, Percy, Inc., acquired 70 percent of Sledge's
outstanding voting stock. At that date, $82,000 of the
acquisition-date fair value was assigned to unrecorded contracts
(with a 20-year life) and $42,000 to an undervalued building (with
a 10-year remaining life).
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