On December 31, 2020, Bridgeport Company borrowed $69,348 from Paris Bank, signing a 5-year, $106,700 zero-interest-bearing note. The note was issued to yield 9% interest. Unfortunately, during 2022, Bridgeport began to experience financial difficulty. As a result, at December 31, 2022, Paris Bank determined that it was probable that it would receive back only $80,025 at maturity. The market rate of interest on loans of this nature is now 10%.
Prepare the entry to record the issuance of the loan by Paris Bank on December 31, 2020. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Date |
Account Titles and Explanation |
Debit |
Credit |
Dec. 31, 2020 | |||
List of Accounts
Prepare the entry, if any, to record the impairment of the loan on December 31, 2022, by Paris Bank. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Date |
Account Titles and Explanation |
Debit |
Credit |
Dec. 31, 2022 | |||
On December 31, 2020, Bridgeport Company borrowed $69,348 from Paris Bank, signing a 5-year, $106,700 zero-interest-bearing...
On December 31, 2017, BLANK Company borrowed $67,008 from BLANK
Bank, signing a 5-year, $103,100 zero-interest-bearing note. The
note was issued to yield 9% interest. Unfortunately, during 2019,
BLANK company began to experience financial difficulty. As a
result, at December 31, 2019, BLANK Bank determined that it was
probable that it would receive back only $77,325 at maturity. The
market rate of interest on loans of this nature is now 10%.
Prepare the entry to record the issuance of the...
On December 31, 2020, Carla Co. performed environmental consulting services for Hayduke Co. Hayduke was short of cash, and Carla Co. agreed to accept a $318,100 zero-interest-bearing note due December 31, 2022, as payment in full. Hayduke is somewhat of a credit risk and typically borrows funds at a rate of 11%. Carla is much more creditworthy and has various lines of credit at 5% - Your answer is partially correct. Prepare the journal entry to record the transaction of...
* Question 4
On December 31, 2020, Blue Company acquired a computer from
Plato Corporation by issuing a $609,000 zero-interest-bearing note,
payable in full on December 31, 2024. Blue Company’s credit rating
permits it to borrow funds from its several lines of credit at 12%.
The computer is expected to have a 5-year life and a $63,000
salvage value.
Prepare the journal entry for the purchase on December 31,
2020. (Round present value factor calculations to 5
decimal places, e.g....
On December 31, 2020, Blossom Company acquired a computer from
Plato Corporation by issuing a $650,000 zero-interest-bearing note,
payable in full on December 31, 2024. Blossom Company’s credit
rating permits it to borrow funds from its several lines of credit
at 12%. The computer is expected to have a 5-year life and a
$76,000 salvage value.
Prepare the journal entry for the purchase on December 31,
2020. (Round present value factor calculations to 5
decimal places, e.g. 1.25124 and the...
The government lent $80,000 to Bridgeport Industries, who signed a 5-year, zero-interest note dated January 1, 2021 to help finance the construction of a building. The market rate of interest is 4% and the effective interest method of amortization is used. The loan will be forgiven if Bridgeport provides employment for a specified number of individuals for a specified period of time. If these conditions are not met, the amount is due to the government in full in five years....
On December 31, 2020, Blue Company acquired a computer from Plato Corporation by issuing a $636,000 zero-interest-bearing note, payable in full on December 31, 2024. Blue Company’s credit rating permits it to borrow funds from its several lines of credit at 12%. The computer is expected to have a 5-year life and a $71,000 salvage value Prepare the journal entry for the purchase on December 31, 2020. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the...
On December 31, 2020, Flounder Company acquired a computer from Plato Corporation by issuing a $592,000 zero-interest-bearing note, payable in full on December 31, 2024. Flounder Company's credit rating permits it to borrow funds from its several lines of credit at 12%. The computer is expected to have a 5-year life and a $66,000 salvage value. Prepare the journal entry for the purchase on December 31, 2020. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the...
On December 31, 2020, Coronado Company acquired a computer from Plato Corporation by issuing a $569,000 zero-interest-bearing note, payable in full on December 31, 2024. Coronado Company's credit rating permits it to borrow funds from its several lines of credit at 10%. The computer is expected to have a 5-year life and a $65,000 salvage value. Prepare the journal entry for the purchase on December 31, 2020. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the...
On December 31, 2020, Riverbed Co. performed environmental consulting services for Hayduke Co. Hayduke was short of cash, and Riverbed Co. agreed to accept a $264.100 zero-interest-bearing note due December 31, 2022, as payment in full. Hayduke is somewhat of a credit risk and typically borrows funds at a rate of 11%. Riverbed is much more creditworthy and has various lines of credit at 6%. Prepare the journal entry to record the transaction of December 31, 2020. for the Riverbed...
On May 1, 2020, Crane Corp. issued $560,000, 12%, 5-year bonds at face value. The bonds were dated May 1, 2020, and pay interest annually on May 1. Financial statements are prepared annually on December 31. Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Debit Credit Date Account Titles and Explanation May 1, 2020 SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO...