Amount $ | |||||
(b) | Date | Cash Received | Interest Revenue | Increase in | Carrying amount |
@10% of 1,284,300 | @12% of Carrying amount | Carrying amount | of Note | ||
A | B | B-A | |||
12/31/20 | 1,191,712 | ||||
12/31/21 | 128,430 | 143,005 | 14,575 | 1,206,287 | |
12/31/22 | 128,430 | 144,754 | 16,324 | 1,222,611 | |
On December 31, 2020Nash Company signed a $1.284,300 note to Crane Bank. The market interest rate...
On December 31, 2020, Nash Company signed a $1,284,300 note to Crane Bank. The market interest rate at that time was 12%. The stated interest rate on the note was 10%, payable annually. The note matures in 5 years. Unfortunately, because of lower sales, Nash's financial situation worsened on December 31, 2022, Crane Bank determined that it was probable that the company would pay back only $770,580 of the principal at maturity. However, it was considered likely that interest would...
On December 31, 2020, Nash Company signed a $1,284,300 note to Crane Bank. The market interest rate at that time was 12%. The stated interest rate on the note was 10%, payable annually. The note matures in 5 years. Unfortunately, because of lower sales, Nash's financial situation worsened. On December 31, 2022, Crane Bank determined that it was probable that the company would pay back only $770,580 of the principal at maturity. However, it was considered likely that interest would...
On December 31, 2020, Crane Company signed a $1,184,400 note to Cheyenne Bank. The market interest rate at that time was 11%. The stated interest rate on the note was 9%, payable annually. The note matures in 5 years. Unfortunately, because of lower sales, Crane’s financial situation worsened. On December 31, 2022, Cheyenne Bank determined that it was probable that the company would pay back only $710,640 of the principal at maturity. However, it was considered likely that interest would...
On December 31, 2020, Ayayai Company signed a $1,061,900 note to Pina Bank. The market interest rate at that time was 11%. The stated interest rate on the note was 9%, payable annually. The note matures in 5 years. Unfortunately, because of lower sales, Ayayai’s financial situation worsened. On December 31, 2022, Pina Bank determined that it was probable that the company would pay back only $637,140 of the principal at maturity. However, it was considered likely that interest would...
On December 31, 2020, Pharoah Company signed a $1,132,500 note to Novak Bank. The market interest rate at that time was 10%. The stated interest rate on the note was 8%, payable annually. The note matures in 5 years. Unfortunately, because of lower sales, Pharoah’s financial situation worsened. On December 31, 2022, Novak Bank determined that it was probable that the company would pay back only $679,500 of the principal at maturity. However, it was considered likely that interest would...
On December 31, 2020, Headland Company signed a $1,132,500 note to Sage Bank. The market interest rate at that time was 10%. The stated interest rate on the note was 8%, payable annually. The note matures in 5 years. Unfortunately, because of lower sales, Headland's financial situation worsened. On December 31, 2022, Sage Bank determined that it was probable that the company would pay back only $679,500 of the principal at maturity. However, it was considered likely that interest would...
On December 31, 2020, Sheffield Company signed a $1,186,300 note to Tamarisk Bank. The market interest rate at that time was 12%. The stated interest rate on the note was 10%, payable annually. The note matures in 5 years. Unfortunately, because of lower sales, Sheffield’s financial situation worsened. On December 31, 2022, Tamarisk Bank determined that it was probable that the company would pay back only $711,780 of the principal at maturity. However, it was considered likely that interest would...
On December 31, 2020, Pharoah Company signed a $1,056,900 note to Novak Bank. The market interest rate at that time was 10%. The stated interest rate on the note was 8%, payable annually. The note matures in 5 years. Unfortunately, because of lower sales, Pharoah’s financial situation worsened. On December 31, 2022, Novak Bank determined that it was probable that the company would pay back only $634,140 of the principal at maturity. However, it was considered likely that interest would...
Current Attempt in Progress On December 31, 2020, Vaughn Company signed a $1,105,800 note to Bramble Bank. The market interest rate at that time was 11%. The stated interest rate on the note was 9%, payable annually. The note matures in 5 years. Unfortunately, because of lower sales, Vaughn's financial situation worsened. On December 31, 2022, Bramble Bank determined that it was probable that the company would pay back only $663,480 of the principal at maturity. However, it was considered...
Exercise 7-27 On December 31, 2017, Cullumber Company signed a $1,054,800 note to Riverbed Bank. The market interest rate at that time was 11%. The stated interest rate on the note was 9%, payable annually. The note matures in 5 years. Unfortunately, because of lower sales, Cullumber’s financial situation worsened. On December 31, 2019, Riverbed Bank determined that it was probable that the company would pay back only $632,880 of the principal at maturity. However, it was considered likely that...