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Watt Service Inc. completed a major renovation contract and billed the customer $56,000 on January 1,...
Note Receivable Problem #3 On January 1, 2020, ABC sold merchandise for to a customer and...
Note Receivable Problem #3 On January 1, 2020, ABC sold merchandise for to a customer and agreed a $100,000 note receivable paid in four equal annual installments, each due on December 31. Note has no (zero) stated rate and an imputed interest rate of 8%. a. Determine the issue price of the note receivable. b. Provide the journal entry to record the bond issue? C. Determine the amount of interest revenue that Sparky will recognize over the life of the...
On January 1, 2020, Jet Air Inc. contracted with Systems Plus Inc. to manufacture heavy equipment....
On January 1, 2020, Jet Air Inc. contracted with Systems Plus Inc. to manufacture heavy equipment. Jet Air Inc. issued a $67,500 note to Systems Plus Inc. in exchange for the equipment that required 5% interest payments annually over 3 years on December 31 of each year. Although the fair value of the customized heavy equipment was not reasonably determinable, it was determined that 10% was a reasonable rate of interest for such a transaction. Provide journal entries to be...
Sheffield Inc. had the following long-term receivable account balances at December 31, 2019. Note receivable from...
Sheffield Inc. had the following long-term receivable account balances at December 31, 2019. Note receivable from sale of division $2,400,000 Note receivable from officer 495,100 Transactions during 2020 and other information relating to Sheffield’s long-term receivables were as follows. 1. The $2,400,000 note receivable is dated May 1, 2019, bears interest at 10%, and represents the balance of the consideration received from the sale of Sheffield’s electronics division to New York Company. Principal payments of $800,000 plus appropriate interest are...
Carla Inc. had the following long-term receivable account balances at December 31, 2019. Note receivable from...
Carla Inc. had the following long-term receivable account balances at December 31, 2019. Note receivable from sale of division $2,400,000 Note receivable from officer 495,100 Transactions during 2020 and other information relating to Carla's long-term receivables were as follows. 1. The $2,400,000 note receivable is dated May 1, 2019, bears interest at 10%, and represents the balance of the consideration received from the sale of Carla's electronics division to New York Company. Principal payments of $800,000 plus appropriate interest are...
On January 1, 2020, a borrower signed a long-term note, face amount, $40,000; time to maturity,...
On January 1, 2020, a borrower signed a long-term note, face amount, $40,000; time to maturity, three years; stated rate of interest, 8%. The market rate of interest of 10% determined the cash received by the borrower. The note will be paid in three equal annual installments of $15,521 each December 31 (which is also the end of the accounting period for the borrower). Required a. Compute the cash received by the borrower and prepare a debt amortization schedule. Note:...
Recording a Note Payable Issued for Non-Cash Consideration On January 1, 2020, Jet Air Inc. contracted...
Recording a Note Payable Issued for Non-Cash Consideration On January 1, 2020, Jet Air Inc. contracted with Systems Plus Inc. to manufacture heavy equipment. Jet Air Inc. issued a $22,500 note to Systems Plus Inc. in exchange for the equipment that required 5% interest payments annually over 3 years on December 31 of each year. Although the fair value of the customized heavy equipment was not reasonably determinable, it was determined that 10% was a reasonable rate of interest for...
Sweet Inc. had the following long-term receivable account balances at December 31, 2019. Note receivable from...
Sweet Inc. had the following long-term receivable account balances at December 31, 2019. Note receivable from sale of division $1,200,000 Note receivable from officer 491,300 Transactions during 2020 and other information relating to Sweet’s long-term receivables were as follows. 1. The $1,200,000 note receivable is dated May 1, 2019, bears interest at 10%, and represents the balance of the consideration received from the sale of Sweet’s electronics division to New York Company. Principal payments of $400,000 plus appropriate interest are...
On 1 January 2019, Walkinson Ltd entered into a 6-year contract to lease a crane for...
On 1 January 2019, Walkinson Ltd entered into a 6-year contract to lease a crane for its freight terminal. When negotiating the lease contract, on 1 January 2019, Walkinson Ltd paid direct costs of $20,000 for technical advice from an engineering consultancy. The lease contract requires Walkinson Ltd to make 6 annual lease payments of $60,000, commencing on 30 June 2019. The lease contract includes a bargain purchase option, (which Walkinson Ltd is expected to exercise), to purchase the crane...
* (Long-Term Contract with an Overall Loss) On June 1, 2020, Roman Construction Company Inc. contracted...
* (Long-Term Contract with an Overall Loss) On June 1, 2020, Roman Construction Company Inc. contracted to build an office building for Sicily Corp. for a total contract price of $2,600,000. On July 1, Roman estimated that it would take between 2 and 3 years to complete the building. On December 31, 2022, the building was deemed substantially completed. Following are accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Sicily 2020, 2021, and 2022:...
QUESTION On 1 January 2019, Walkinson Ltd entered into a 6-year contract to lease a crane...
QUESTION On 1 January 2019, Walkinson Ltd entered into a 6-year contract to lease a crane for its freight terminal. When negotiating the lease contract, on 1 January 2019, Walkinson Ltd paid direct costs of $20,000 for technical advice from an engineering consultancy. The lease contract requires Walkinson Ltd to make 6 annual lease payments of $60,000, commencing on 30 June 2019. The lease contract includes a bargain purchase option, (which Walkinson Ltd is expected to exercise), to purchase the...
Note Receivable Problem #3 On January 1, 2020, ABC sold merchandise for to a customer and agreed a $100,000 note receivable paid in four equal annual installments, each due on December 31. Note has no (zero) stated rate and an imputed interest rate of 8%. a. Determine the issue price of the note receivable. b. Provide the journal entry to record the bond issue? C. Determine the amount of interest revenue that Sparky will recognize over the life of the...
On January 1, 2020, Jet Air Inc. contracted with Systems Plus Inc. to manufacture heavy equipment. Jet Air Inc. issued a $67,500 note to Systems Plus Inc. in exchange for the equipment that required 5% interest payments annually over 3 years on December 31 of each year. Although the fair value of the customized heavy equipment was not reasonably determinable, it was determined that 10% was a reasonable rate of interest for such a transaction. Provide journal entries to be...
Carla Inc. had the following long-term receivable account balances at December 31, 2019. Note receivable from sale of division $2,400,000 Note receivable from officer 495,100 Transactions during 2020 and other information relating to Carla's long-term receivables were as follows. 1. The $2,400,000 note receivable is dated May 1, 2019, bears interest at 10%, and represents the balance of the consideration received from the sale of Carla's electronics division to New York Company. Principal payments of $800,000 plus appropriate interest are...
Recording a Note Payable Issued for Non-Cash Consideration On January 1, 2020, Jet Air Inc. contracted with Systems Plus Inc. to manufacture heavy equipment. Jet Air Inc. issued a $22,500 note to Systems Plus Inc. in exchange for the equipment that required 5% interest payments annually over 3 years on December 31 of each year. Although the fair value of the customized heavy equipment was not reasonably determinable, it was determined that 10% was a reasonable rate of interest for...
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