Questions 9-11 On January 1, 2019, Will, Inc. rendered services to ABC Co. in exchange for...
Questions 9-11
On January 1, 2019, Will, Inc. rendered services to ABC Co. in exchange for a $378,000, 5 year note. The terms of the agreement require ABC to make semi-annual installment payments of P&I with the first installment due July 1st. An annual interest rate of 8% is imputed. Each payment is to be received on July 1 and Jan 1. Will’s year end is December 31st.
Required:
|
1. What amount of Service Revenue can Will record on January 1, 2019? |
$_________________________ |
Question 10
Using the information presented in #9 above, what amount of interest revenue should be recognized on this note for the year ending Dec 31, 2020?
Question 11
Using the information in #9 above, determine the Carrying Value of the note Receivable at December 31, 2020
Homework Answers
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Questions 9-11
On January 1, 2019, Will, Inc. rendered services to ABC Co. in
exchange for...
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On December 31, 2017, BLANK Inc. rendered services to BLANK
Corporation at an agreed price of $109,448, accepting $42,900 down
and agreeing to accept the balance in four equal installments of
$21,450 receivable each December 31. An assumed interest rate of
11% is imputed.
Prepare an amortization schedule. Assume that the
effective-interest method is used for amortization purposes.
December 31, 2017
Schedule of Note Discount Amortization
Date
Cash
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Interest
Revenue
Carrying
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12/31/17
$
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$
12/31/18...
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On January 1, 2019, ABC Company leased office equipment from ZZ, Inc. The lease terms require...
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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 December 31, 2017, BLANK Inc. rendered services to BLANK
Corporation at an agreed price of $109,448, accepting $42,900 down
and agreeing to accept the balance in four equal installments of
$21,450 receivable each December 31. An assumed interest rate of
11% is imputed.
Prepare an amortization schedule. Assume that the
effective-interest method is used for amortization purposes.
December 31, 2017
Schedule of Note Discount Amortization
Date
Cash
Received
Interest
Revenue
Carrying
Amount of Note
12/31/17
$
$
$
12/31/18...
On January 1, 2019, Conjecture Inc. issued 5-year bonds with a face value of $100,000 and an annual stated interest rate of 8%. Interest payments are made semi-annually on June 30th and December 31st. The bonds were issued for $108,530, when the market rate of interest was 6%. How much interest expense will Conjecture record for the six months July 1 - December 31, 2019?
Note Receivable Problem #3 On January 1, 2020, ABC sold merchandise for to a customer and agreed a $100,000 note receivable paid in four equal annual installments, each due on December 31. Note has no (zero) stated rate and an imputed interest rate of 8%. a. Determine the issue price of the note receivable. b. Provide the journal entry to record the bond issue? C. Determine the amount of interest revenue that Sparky will recognize over the life of the...
Question 7 O out of 0.5 points On January 1, 2019, Solo Inc. issued $271,000 of its 7% bonds at 93. Interest is payable semiannually on January 1 and July 1. The bonds mature in ten years. Solo uses straight-line amortization. The amount of interest expense for the year is: Question 8 0 out of 0.5 points Pope Industries purchased a machine from Fitz Corporation on October 1, 2016. In payment for the $211,000 purchase, Pope issued a two year...
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