ZuoTi.Pro
Question

bosworth corporation accepted a 5-year note receivable from steelman company on january 1 year 1. the...

bosworth corporation accepted a 5-year note receivable from steelman company on january 1 year 1. the maturity value of the note is 780000. the note has a stated interest rate of 10%. however, the prevailing market interest rate is 12% abd the note is recorded at 722591. the note requires interest payments on june 30 and december 31. what will be the note balance at december 31 year 1
business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Proceeds of Note receivable = $722591

Interest Receive = $780000 * 5% = $39000

Note balance at december 31 year 1 :-

Period

Interest Receive

Market Rate

Excess of Market rate over Interest Receive

Balance of Note Receivable

January 1, Year 1

$722591

June 30, Year 1

$39000

($722591 * 6%)

=$43355

$4355

($722591 + $4355)

=$726946

Dec 31, Year 1

$39000

($726946 * 6%)

=$43617

$4617

($726946 + $4617)

=$731563

Note balance at december 31 year 1 = $731563

0 0
Add a comment
Know the answer?
Add Answer to:
bosworth corporation accepted a 5-year note receivable from steelman company on january 1 year 1. the...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

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

  • Indigo Corporation issued a 4-year, $47,000, 5% note to Greenbush Company on January 1, 2017, and...

    Indigo Corporation issued a 4-year, $47,000, 5% note to Greenbush Company on January 1, 2017, and received a computer that normally sells for $39,551. The note requires annual interest payments each December 31. The market rate of interest for a note of similar risk is 10%. Prepare Indigo’s journal entries for (a) the January 1 issuance and (b) the December 31 interest. (Round answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the...

  • Spicer Corporation issued a 3-year, $60,000, 6% note to Dorman Company on January 1, 2017, and...

    Spicer Corporation issued a 3-year, $60,000, 6% note to Dorman Company on January 1, 2017, and received an excavator that normally sells for $54,031. The note requires annual interest payments each December 31. The market rate of interest for a note of similar risk is 10%. Prepare Spicer's journal entries for (a) the January 1 issuance and (b) the December 31 interest. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry...

  • Ayayai Corporation issued a 3-year, $58,000,5% note to Blossom Company on January 1, 2017, and received...

    Ayayai Corporation issued a 3-year, $58,000,5% note to Blossom Company on January 1, 2017, and received an excavator that normally sells for $53,031. The note requires annual interest payments each December 31. The market rate of interest for a note of similar risk is 9% Prepare Ayayai's journal entries for (a) the January 1 issuance and (b) the December 31 interest. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is...

  • Bramble Corporation issued a $44,000, 6-year, 5% note to Jernigan Corp. on January 1, 2020, and...

    Bramble Corporation issued a $44,000, 6-year, 5% note to Jernigan Corp. on January 1, 2020, and received a piece of equipment that normally sells for $34,419. The note requires annual interest payments each December 31. The market interest rate for a note of similar risk is 10%. Using (1) a financial calculator or (2) Excel function Rate, calculate the implicit interest rate. (Round answer to 0 decimal places, e.g. 52%.) Implicit interest rate Enter your answer in accordance to the...

  • McCormick Corporation issued a 4-year, $40,000, 5% note to Greenbush Company on January 1, 2020, and...

    McCormick Corporation issued a 4-year, $40,000, 5% note to Greenbush Company on January 1, 2020, and received a computer that normally sells for $31,495. The note requires annual interest payments each December 31. The market rate of interest for a note of similar risk is 12%. Prepare McCormick’s journal entries for (a) the January 1 issuance and (b) the December 31 interest. (Round answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the...

  • Question 6 (-12) Lang Corporation issued $600,000 of 8%, 10-year bonds on January 1, 2020, for...

    Question 6 (-12) Lang Corporation issued $600,000 of 8%, 10-year bonds on January 1, 2020, for $560,975. This price provided a yield of 9% on the bonds. Interest is payable semiannually on June 30 and December 31. If Lang uses the effective-interest method, the amount of interest expense to record if financial statements are issued on December 31, 2020 should be: $50,544. (2) $49,448. * $48,685. 4 $48,000. Question 7 -- /2 Freedom Corporation buys and sells debt securities which...

  • On January 1, 2018. Bandar Company accepted a 14 note, dated January 1, 2018, with a...

    On January 1, 2018. Bandar Company accepted a 14 note, dated January 1, 2018, with a face amount of 52.440.000 in exchange for cash. The note is due in 10 years. For notes of similar risk and maturity, the market interest rate is 16%. Interest is paid each December 31 Read the requirements Requirement a. Determine the present value of the note at January 1 2018. (Use the present value and future value tables, a financial calculat decimal places XXX...

  • On January​ 1, Southwest Corp. accepted a​ one-year note for​ $70,000 at​ 5% from one of...

    On January​ 1, Southwest Corp. accepted a​ one-year note for​ $70,000 at​ 5% from one of its customers. When the note matured on December​ 31, the customer was unable to​ pay, and the company recorded the dishonor. The amount of the debit recorded on December 31 is​ ________. A. 66500 B. 3500 C. 70000 D. 73500

  • The ABC Company rendered services on 1/1/15 and accepted a $10,000, 4%, 5-year note receivable with...

    The ABC Company rendered services on 1/1/15 and accepted a $10,000, 4%, 5-year note receivable with interest to be paid annually on December 31 through 12/31/19. The principal will be paid in full on 12/31/19. ABC's imputed interest rate is 8% and the effective amortization method is used. The initial journal entry to record the receipt of the note will include an entry to which account for what approximate amount? Select one: a. Debit to Discount on Notes Receivable for...

  • On January 1, 2018, a corporation issued a $100,000, 5-year maturity, 10% bond. The interest is...

    On January 1, 2018, a corporation issued a $100,000, 5-year maturity, 10% bond. The interest is payable semi- annually on June 30 and December 31. The market interest rate is 10% at issuance. What is the interest expense for the year ending December 31, 2018? A. $12,000 B. $10,741 C. $10,000 D. $6,000 E. $5,386 plz use computer and plz explain with good calculations.. plz

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