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Indigo Company has a 12% note payable with a carrying value of $16,000. Indigo applies the fair value option to this note. Given an increase in market interest rates, the fair value of the note is $18, 180. Prepare the entry to record the fair value option for this note, assuming no change in credit risk. (If no entry is required, select "No entry" for the account titles and enter o for the amounts. Credit account titles are automatically indented...
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Flint Co. owes $181,300 to Buffalo Inc. The debt is a 10-year, 11% note. Because Flint Co. is in financial trouble, Buffalo Inc. agrees to accept some land and cancel the entire debt. The land has a book value of $96,500 and a fair value of $129,600. (a) Prepare the journal entry on Flint's books for debt restructure. (b) Prepare the journal entry on Buffalo's books for debt restructure (If no entry is required, select "No Entry" for the account...
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Flint Company sells goods to Danone Inc. by accepting a note receivable on January 2, 2020. The goods have a sales price of $669,100 (cost of $540,000). The terms are net 30. If Danone pays within 5 days, however, it receives a cash discount of $9,100. Past history indicates that the cash discount will be taken. On January 28, 2020, Danone makes payment to Flint for the full sales price. Prepare the journal entry(les) to record the sale and related...
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Presented below is information related to copyrights owned by Sunland Company at December 31, 2020. Cost Carrying amount Expected future net cash flows Fair value $8,520,000 4,470,000 4,020,000 3,450,000 Assume that Sunland Company will continue to use this copyright in the future. As of December 31, 2020, the copyright is estimated to have a remaining useful life of 10 years. Prepare the journal entry to record the impairment of the asset at December 31, 2020. The company does not use...
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Exercise 12-13 Presented below is information related to copyrights owned by Blossom Company at December 31, 2017. Cost Carrying amount Expected future net cash flows Fair value $8,670,000 4,400,000 4,020,000 3,360,000 Assume that Blossom Company will continue to use this copyright in the future. As of December 31, 2017, the copyright is estimated to have a remaining useful life of 10 years. Prepare the journal entry to record the impairment of the asset at December 31, 2017. The company does...
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Exercise 11-16 Presented below
is information related to equipment owned by Cheyenne Company at
December 31, 2017. Cost $10,800,000 Accumulated depreciation to
date 1,200,000 Expected future net cash flows 8,400,000 Fair value
5,760,000 Assume that Cheyenne will continue to use this asset in
the future. As of December 31, 2017, the equipment has a remaining
useful life of 5 years. Prepare the journal entry (if any) to
record the impairment of the asset at December 31, 2017. (If no
entry...
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Presented below is information related to equipment owned by Swifty Company at December 31, 2020. Cost Accumulated depreciation to date Expected future net cash flows Fair value $9,270,000 1,030,000 7,210,000 4,944,000 Assume that Swifty will continue to use this asset in the future. As of December 31, 2020, the equipment has a remaining useful life of 4 years. Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2020. (If no entry is required,...
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Presented below is information related to equipment owned by Marigold Company at December 31, 2020. Cost Accumulated depreciation to date Expected future net cash flows Fair value $9,360,000 1,040,000 7,280,000 4,992,000 Assume that Marigold will continue to use this asset in the future. As of December 31, 2020, the equipment has a remaining useful life of 5 years. Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2020. (If no entry is required,...
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Presented below is information related to equipment owned by Nash Company at December 31, 2020. Cost $9,180,000 Accumulated depreciation to date 1.020,000 Expected future net cash flows 7.140,000 Fair value 4,896,000 Assume that Nash will continue to use this asset in the future. As of December 31, 2020, the equipment has a remaining useful life of 5 years. Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2020. (If no entry is required,...
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Presented below is information related to equipment owned by Marigold Company at December 31, 2020. Cost Accumulated depreciation to date Expected future net cash flows Fair value $9,360,000 1,040,000 7,280,000 4,992,000 Assume that Marigold will continue to use this asset in the future. As of December 31, 2020, the equipment has a remaining useful life of 5 years. Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2020. (If no entry is required,...
Indigo Company has a 12% note payable with a carrying value of $16,000. Indigo applies the fair value option to this note. Given an increase in market interest rates, the fair value of the note is $18, 180. Prepare the entry to record the fair value option for this note, assuming no change in credit risk. (If no entry is required, select "No entry" for the account titles and enter o for the amounts. Credit account titles are automatically indented...
Flint Co. owes $181,300 to Buffalo Inc. The debt is a 10-year, 11% note. Because Flint Co. is in financial trouble, Buffalo Inc. agrees to accept some land and cancel the entire debt. The land has a book value of $96,500 and a fair value of $129,600. (a) Prepare the journal entry on Flint's books for debt restructure. (b) Prepare the journal entry on Buffalo's books for debt restructure (If no entry is required, select "No Entry" for the account...
Flint Company sells goods to Danone Inc. by accepting a note receivable on January 2, 2020. The goods have a sales price of $669,100 (cost of $540,000). The terms are net 30. If Danone pays within 5 days, however, it receives a cash discount of $9,100. Past history indicates that the cash discount will be taken. On January 28, 2020, Danone makes payment to Flint for the full sales price. Prepare the journal entry(les) to record the sale and related...
Presented below is information related to copyrights owned by Sunland Company at December 31, 2020. Cost Carrying amount Expected future net cash flows Fair value $8,520,000 4,470,000 4,020,000 3,450,000 Assume that Sunland Company will continue to use this copyright in the future. As of December 31, 2020, the copyright is estimated to have a remaining useful life of 10 years. Prepare the journal entry to record the impairment of the asset at December 31, 2020. The company does not use...
Exercise 12-13 Presented below is information related to copyrights owned by Blossom Company at December 31, 2017. Cost Carrying amount Expected future net cash flows Fair value $8,670,000 4,400,000 4,020,000 3,360,000 Assume that Blossom Company will continue to use this copyright in the future. As of December 31, 2017, the copyright is estimated to have a remaining useful life of 10 years. Prepare the journal entry to record the impairment of the asset at December 31, 2017. The company does...
Exercise 11-16 Presented below
is information related to equipment owned by Cheyenne Company at
December 31, 2017. Cost $10,800,000 Accumulated depreciation to
date 1,200,000 Expected future net cash flows 8,400,000 Fair value
5,760,000 Assume that Cheyenne will continue to use this asset in
the future. As of December 31, 2017, the equipment has a remaining
useful life of 5 years. Prepare the journal entry (if any) to
record the impairment of the asset at December 31, 2017. (If no
entry...
Presented below is information related to equipment owned by Swifty Company at December 31, 2020. Cost Accumulated depreciation to date Expected future net cash flows Fair value $9,270,000 1,030,000 7,210,000 4,944,000 Assume that Swifty will continue to use this asset in the future. As of December 31, 2020, the equipment has a remaining useful life of 4 years. Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2020. (If no entry is required,...
Presented below is information related to equipment owned by Marigold Company at December 31, 2020. Cost Accumulated depreciation to date Expected future net cash flows Fair value $9,360,000 1,040,000 7,280,000 4,992,000 Assume that Marigold will continue to use this asset in the future. As of December 31, 2020, the equipment has a remaining useful life of 5 years. Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2020. (If no entry is required,...
Presented below is information related to equipment owned by Nash Company at December 31, 2020. Cost $9,180,000 Accumulated depreciation to date 1.020,000 Expected future net cash flows 7.140,000 Fair value 4,896,000 Assume that Nash will continue to use this asset in the future. As of December 31, 2020, the equipment has a remaining useful life of 5 years. Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2020. (If no entry is required,...
Presented below is information related to equipment owned by Marigold Company at December 31, 2020. Cost Accumulated depreciation to date Expected future net cash flows Fair value $9,360,000 1,040,000 7,280,000 4,992,000 Assume that Marigold will continue to use this asset in the future. As of December 31, 2020, the equipment has a remaining useful life of 5 years. Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2020. (If no entry is required,...