On January 1, 2018, Byner Company purchased a used tractor. Byner paid $4,000 down and signed...
On January 1, 2018, Byner Company purchased a used tractor.
Byner paid $4,000 down and signed a noninterest-bearing note
requiring $28,000 to be paid on December 31, 2020. The fair value
of the tractor is not determinable. An interest rate of 12%
properly reflects the time value of money for this type of loan
agreement. The company’s fiscal year-end is December 31. (FV of $1,
PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
(Use appropriate factor(s) from the tables
provided.)
Required:
1. Prepare the journal entry to record the
acquisition of the tractor.
2. How much interest expense will the company
include in its 2018 and 2019 income statements for this note?
3. What is the amount of the liability the company
will report in its 2018 and 2019 balance sheets for this note?
Homework Answers
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On January 1, 2018, Byner Company purchased a used tractor.
Byner paid $4,000 down and signed...
On January 1, 2021, Byner Company purchased a used tractor. Byner paid $4,000 down and signed a noninterest-bearing note requiring $33,000 to be paid on December 31, 2023. The fair value of the tractor is not determinable. An interest rate of 12% properly
On January 1, 2021, Byner Company purchased a used tractor. Byner paid $4,000 down and signed a noninterest-bearing note requiring $33,000 to be paid on December 31, 2023. The fair value of the tractor is not determinable. An interest rate of 12% properly reflects the time value of money for this type of loan agreement. The company’s fiscal year-end is December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of...
On January 1, 2021, Byner Company purchased a used tractor. Byner pald $2,000 down and signed...
On January 1, 2021, Byner Company purchased a used tractor. Byner pald $2,000 down and signed a noninterest-bearing note requiring $29,000 to be paid on December 31, 2023. The fair value of the tractor is not determinable. An interest rate of 10% properly reflects the time value of money for this type of loan agreement. The company's fiscal year-end is December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of...
Check my work On January 1, 2018, Byner Company purchased a used tractor. Byner paid $2,000...
Check my work On January 1, 2018, Byner Company purchased a used tractor. Byner paid $2,000 down and signed a noninterest-bearing note requiring $29,000 to be paid on December 31, 2020. The fair value of the tactor is not determinable. An interest rate of 10% popery reflects the time value of money for this type of loan agreement. The company's fiscal year-end is December 31. (EV of $1. PV of $1 FVA of $1. PVA of $1, EVAD of $1...
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On January 1, 2021, The Barrett Company purchased merchandise from a supplier. Payment was a noninterest-bearing...
On January 1, 2021, The Barrett Company purchased merchandise from a supplier. Payment was a noninterest-bearing note requiring five annual payments of $32,000 on each December 31 beginning on December 31, 2021, and a lump-sum payment of $220,000 on December 31, 2025. A 12% interest rate properly reflects the time value of money in this situation. ((FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the...
On June 30, 2016, Kimberly Farms purchased custom-made harvesting equipment from a local producer. In payment,...
On June 30, 2016, Kimberly Farms purchased custom-made
harvesting equipment from a local producer. In payment, Kimberly
signed a noninterest-bearing note requiring the payment of $92,000
in two years. The fair value of the equipment is not known, but an
8% interest rate properly reflects the time value of money for this
type of loan agreement. (FV of $1, PV of $1, FVA of $1, PVA of $1,
FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from
the...
Lincoln Company purchased merchandise from Grandville Corp. on September 30, 2021. Payment was made in the...
Lincoln Company purchased merchandise from Grandville Corp. on September 30, 2021. Payment was made in the form of a noninterest-bearing note requiring Lincoln to make six annual payments of $7,200 on each September 30, beginning on September 30, 2024. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided. Round your final answer to nearest whole dollar amount.) Required: Calculate the amount at which...
Lincoln Company purchased merchandise from Grandville Corp. on September 30, 2021. Payment was made in the...
Lincoln Company purchased merchandise from Grandville Corp. on September 30, 2021. Payment was made in the form of a noninterest-bearing note requiring Lincoln to make six annual payments of $7,600 on each September 30, beginning on September 30, 2024. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided. Round your final answer to nearest whole dollar amount.) Required: Calculate the amount at which...
On January 1, 2021, Byner Company purchased a used tractor. Byner pald $2,000 down and signed a noninterest-bearing note requiring $29,000 to be paid on December 31, 2023. The fair value of the tractor is not determinable. An interest rate of 10% properly reflects the time value of money for this type of loan agreement. The company's fiscal year-end is December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of...
Check my work On January 1, 2018, Byner Company purchased a used tractor. Byner paid $2,000 down and signed a noninterest-bearing note requiring $29,000 to be paid on December 31, 2020. The fair value of the tactor is not determinable. An interest rate of 10% popery reflects the time value of money for this type of loan agreement. The company's fiscal year-end is December 31. (EV of $1. PV of $1 FVA of $1. PVA of $1, EVAD of $1...
Lincoln Company purchased merchandise from Grandville Corp. on September 30, 2018. Payment was made in the form of a noninterest-bearing note requiring Lincoln to make six annual payments of $6,400 on each September 30, beginning on September 30, 2021. (FV of $1, PV of $1, FVA of $1. PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: Calculate the amount at which Lincoln should record the note payable and corresponding purchases...
On January 1, 2021, The Barrett Company purchased merchandise from a supplier. Payment was a noninterest-bearing note requiring five annual payments of $40,000 on each December 31 beginning on December 31, 2021, and a lump-sum payment of $300,000 on December 31, 2025. A 9% interest rate properly reflects the time value of money in this situation. ((FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the...
On January 1, 2021, The Barrett Company purchased merchandise from a supplier. Payment was a noninterest-bearing note requiring five annual payments of $32,000 on each December 31 beginning on December 31, 2021, and a lump-sum payment of $220,000 on December 31, 2025. A 12% interest rate properly reflects the time value of money in this situation. ((FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the...
On June 30, 2016, Kimberly Farms purchased custom-made
harvesting equipment from a local producer. In payment, Kimberly
signed a noninterest-bearing note requiring the payment of $92,000
in two years. The fair value of the equipment is not known, but an
8% interest rate properly reflects the time value of money for this
type of loan agreement. (FV of $1, PV of $1, FVA of $1, PVA of $1,
FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from
the...
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