Question

On January 1 2021. Laramie Inc acquired land for 59 2 million Laramie paid $27 in cash and signed a 6% not requiring the comp
0 0
Add a comment Improve this question Transcribed image text
Answer #1

OPTION: $9.2 million

EXPLANATION:

The land’s original acquisition cost is $9.2 millions paid as $2.7 million in cash + $6.5 million payable after 2 years. The interest on $6.5 millions is treated as interest expense and not treated capitalized to the asset.

Add a comment
Know the answer?
Add Answer to:
On January 1 2021. Laramie Inc acquired land for 59 2 million Laramie paid $27 in...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • 2.   In 2010, Alto, Inc., had acquired Rastiline Co. and recorded goodwill of $245 million as...

    2.   In 2010, Alto, Inc., had acquired Rastiline Co. and recorded goodwill of $245 million as a result. The net assets (including goodwill) from Alto's acquisition of Rastiline Co. had a 2011 year-end book value of $580 million. Alto assessed the fair value of Rastiline at this date to be $700 million, while the fair value of all of Rastiline's identifiable tangible and intangible assets (excluding goodwill) was $550 million. The amount of the impairment loss that Alto would record...

  • On January 1, 2021, Byner Company purchased a used tractor. Byner paid $4,000 down and signed a noninterest-bearing note requiring $33,000 to be paid on December 31, 2023. The fair value of the tractor is not determinable. An interest rate of 12% properly

    On January 1, 2021, Byner Company purchased a used tractor. Byner paid $4,000 down and signed a noninterest-bearing note requiring $33,000 to be paid on December 31, 2023. The fair value of the tractor is not determinable. An interest rate of 12% properly reflects the time value of money for this type of loan agreement. The company’s fiscal year-end is December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of...

  • On January 3, 2019, HDR Company acquired a tract of land just outside the city limits....

    On January 3, 2019, HDR Company acquired a tract of land just outside the city limits. The land and existing building were purchased for $4.8 million. HDR Company paid $800,000 and signed a noninterest-bearing note requiring the company to pay the remaining $4,000,000 on December 31, 2020. An interest rate of 7% properly reflects the time value of money for this type of loan agreement. Transfer taxes, title insurance, and other costs totaling $48,000 were paid at closing.      During...

  • A company purchased land, a building, and equipment for one price of $1,600,000. The estimated fair...

    A company purchased land, a building, and equipment for one price of $1,600,000. The estimated fair values of the land, building, and equipment are $200,000, $1,400,000, and $400,000, respectively. At what amount would the company record the land? Multiple Choice $160,000 o $170,000 $200,000 O $1,600,000 On July 1, 2021, Markwell Company acquired equipment. Markwell paid $195,000 in cash on July 1, 2021, and signed a $780,000 noninterest-bearing note for the remaining balance which is due on July 1, 2022....

  • On January 1, 2021, Byner Company purchased a used tractor. Byner pald $2,000 down and signed...

    On January 1, 2021, Byner Company purchased a used tractor. Byner pald $2,000 down and signed a noninterest-bearing note requiring $29,000 to be paid on December 31, 2023. The fair value of the tractor is not determinable. An interest rate of 10% properly reflects the time value of money for this type of loan agreement. The company's fiscal year-end is December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of...

  • Early in its fiscal year ending December 31, 2021, San Antonio Outfitters finalized plans to expand...

    Early in its fiscal year ending December 31, 2021, San Antonio Outfitters finalized plans to expand operations. The first stage was completed on March 28 with the purchase of a tract of land on the outskirts of the city. The land and existing building were purchased by paying $360,000 immediately and signing a noninterest-bearing note requiring the company to pay $760,000 on March 28, 2023. An interest rate of 6% properly reflects the time value of money for this type...

  • On January 1, 2018, Byner Company purchased a used tractor. Byner paid $4,000 down and signed...

    On January 1, 2018, Byner Company purchased a used tractor. Byner paid $4,000 down and signed a noninterest-bearing note requiring $28,000 to be paid on December 31, 2020. The fair value of the tractor is not determinable. An interest rate of 12% properly reflects the time value of money for this type of loan agreement. The company’s fiscal year-end is December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of...

  • At January 1, 2021, Brainard Industries, Inc., owed Second BancCorp $19 million under a 10% note...

    At January 1, 2021, Brainard Industries, Inc., owed Second BancCorp $19 million under a 10% note due December 31, 2023. Interest was paid last on December 31, 2019. Brainard was experiencing severe financial difficulties and asked Second BancCorp to modify the terms of the debt agreement. After negotiation Second BancCorp agreed to: a. Forgive the interest accrued for the year just ended. 6. Reduce the remaining two years' interest payments to $1 million each and delay the first payment until...

  • Problem 10-12 (Algo) Acquisition costs; lump-sum acquisition; noninterest-bearing note; Interest capitalization (LO10-1, 10-2, 10-3, 10-7] Early...

    Problem 10-12 (Algo) Acquisition costs; lump-sum acquisition; noninterest-bearing note; Interest capitalization (LO10-1, 10-2, 10-3, 10-7] Early in its fiscal year ending December 31, 2021, San Antonio Outfitters finalized plans to expand operations. The first stage was completed on March 28 with the purchase of a tract of land on the outskirts of the city. The land and existing building were purchased by paying $310.000 immediately and signing a noninterest-bearing note requiring the company to pay $710.000 on March 28, 2023....

  • Check my work At January 1, 2021, Brainard Industries, Inc., owed Second BancCorp $26 million under...

    Check my work At January 1, 2021, Brainard Industries, Inc., owed Second BancCorp $26 million under a 10% note due December 31, 2023. Interest was paid last on December 31, 2019. Brainard was experiencing severe financial difficulties and asked Second BancCorp to modify the terms of the debt agreement. After negotiation Second BancCorp agreed to a. Forgive the interest accrued for the year just ended. 6. Reduce the remaining two years interest payments to $2 million each and delay the...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT