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 question statement % |
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Bramble Corporation issued a $44,000, 6-year, 5% note to
Jernigan Corp. on January 1, 2020, and...
Oriole Incorporated issued a $106,000, 5-year, zero-interest-bearing note to Cheyenne Corp. on January 1, 2020, and...
Oriole Incorporated issued a $106,000, 5-year, zero-interest-bearing note to Cheyenne Corp. on January 1, 2020, and received $57,000 cash. Oriole uses the effective interest method. Using (1) a financial calculator or (2) Excel function Rate, calculate the implicit interest rate. (Round answer to 2 decimal places, e.g. 52.25%.) Implicit interest rate Enter your answer in accordance to the question statement %
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
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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...
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...
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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...
Concord Corporation issued a 5-year, $82,000, zero-interest-bearing note to Brown Company on January 1, 2020, and...
Concord Corporation issued a 5-year, $82,000, zero-interest-bearing note to Brown Company on January 1, 2020, and received cash of $48,663. The implicit interest rate is 11%. Prepare Concord’s journal entries for (a) the January 1 issuance and (b) the December 31 recognition of interest.
Bramble Corporation, a publicly-traded company, agreed to loan money to another company. On July 1, 2020,...
Bramble Corporation, a publicly-traded company, agreed to loan money to another company. On July 1, 2020, the company received a five-year promissory note with a face value of $503,000, paying interest at a face rate of 6% on July 1 each year. The note was issued to yield an effective interest rate of 7%. Bramble used the effective interest method of amortization for discounts or premiums, and the company’s year-end is September 30. Use 1. PV.1 Tables, 2. a financial...
On January 1, 2020, Bramble Corporation sold a building that cost $274.380 and that had accumulated...
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Larkspur Corporation issued a 4-year, $81,000, zero-interest-bearing note to Brown Company on January 1, 2020, and...
Larkspur Corporation issued a 4-year, $81,000, zero-interest-bearing note to Brown Company on January 1, 2020, and received cash of $46,312. The implicit interest rate is 15%. Prepare Larkspur's journal entries for (a) the January 1 issuance and (b) the December 31 recognition of interest. (Round answers to O 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 amount is entered....
Bramble Corp. erected and placed into service an offshore oil platform on January 1, 2020, at...
Bramble Corp. erected and placed into service an offshore oil platform on January 1, 2020, at a cost of $8 million. Bramble is legally required to dismantle and remove the platform at the end of its 7-year useful life. Bramble estimates that it will cost $1 million to dismantle and remove the platform at the end of its useful life and that the discount rate to use should be 6%. Use (a) factor Table A.2, (b) a financial calculator, or...
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...
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 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 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...
On January 1, 2020, Bramble Corporation sold a building that cost $274.380 and that had accumulated depreciation of $105,010 on the date of sale. Bramble received as consideration a $264,380 non-interest-bearing note due on January 1, 2023. There was no established exchange price for the building, and the note had na ready market. The prevailing rate of interest for a note of this type on January 1, 2020 was 12%. At what amount should the gain from the sale of...
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