Homework Answers
Ans:
Martinez Corporation
Entry to record purchase of truck financed by notes payable:
|
Date |
Account Titles and Explanation |
Ref. No. |
Debit |
Credit |
|
Truck |
$78,210 |
|||
|
Discount on Notes Payable |
$32,190 |
|||
|
Notes Payable |
$110,400 |
|||
Computations:
Determination of the price of note:
Price of note, P = face value of the note/(1+i)n
Face value of note = $110,400
N = period = 4 years
Market Interest rate = 9%
P = 110,400/(1+ 0.09)4
Price of note = $78,210
Discount on note = face value – price of note
= $110,400 – 78,210 = $32,190
Add Answer to:
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All the account spaces must be filled.
Skysong Corporation issued a 4-year, $40,000, zero-interest-bearing note to Garcia Company on January 1, 2020, and received cash of $40,000. In addition, Skysong agreed to sell merchandise to Garcia at an amount less than regular selling price over the 4-year period. The market rate of interest for similar notes is 11%. Prepare Skysong Corporation's January 1 journal entry. (Round present value factor calculations to 5 decimal places, eg. 1.25124 and final answer to...
Kingbird Corporation issued a 5-year, $68,000,
zero-interest-bearing note to Garcia Company on January 1, 2020,
and received cash of $68,000. In addition, Kingbird agreed to sell
merchandise to Garcia at an amount less than regular selling price
over the 5-year period. The market rate of interest for similar
notes is 12%.
Prepare Kingbird Corporation’s January 1 journal entry.
(Round present value factor calculations to 5 decimal
places, e.g. 1.25124 and final answer to 0 decimal places, e.g.
38,548. If no...
Brief Exercise 14-11 Samson Corporation issued a 4-year, $75,000, zero-interest-bearing note to Brown Company on January 1, 2020, and received cash of $47,664. The implicit interest rate is 12% Prepare Samson's journal entries for (a) the January 1 issuance and (b) the December 31 recognition of interest. (Round answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter o for the amounts, Credit account titles are automatically indented when...
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Bank, signing a 5-year, $103,100 zero-interest-bearing note. The
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result, at December 31, 2019, BLANK Bank determined that it was
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