Question 6
On December 31, 2020, Wildhorse Co. rendered services to Novak
Corp. at an agreed price of $119,397.33. In payment, Wildhorse
accepted $46,800 cash and agreed to receive the balance in four
equal instalments of $23,400 that are due each December 31. An
interest rate of 11% is applicable.
Click here to view the factor table PRESENT VALUE OF 1.
Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF
1.
The tables in this problem are to be used as a reference for this
problem.
Calculate the value of the note receivable at December 31, 2020.
(Round answer to 2 decimal places, e.g. 5,275.25. For
calculation purposes, use 5 decimal places as displayed in the
factor table provided.)
Note receivable at December 31, 2020: |
Question 6 On December 31, 2020, Wildhorse Co. rendered services to Novak Corp. at an agreed...
P7.8 On December 31, 2020, Zhang Ltd. rendered services to Beggy Corp. at an agreed price of $91,844.10. In payment, Zhang accepted $36,000 cash and agreed to receive the balance in four equal instalments of $18,000 that are due each December 31. An interest rate of 11% is applicable. Instructions a. Calculate the value of the note receivable at December 31, 2020, and prepare an instalment note receivable schedule. b. Prepare the entries recorded by Zhang Ltd. for the sale...
On December 31, 2020, Kingbird Inc. rendered services to Beghun Corporation at an agreed price of $118,390, accepting $45,800 down and agreeing to accept the balance in four equal installments of $22,900 receivable each December 31. An assumed interest rate of 10% is imputed. Prepare an amortization schedule. Assume that the effective-interest method is used for amortization purposes. (Round answers to 0 decimal places, e.g. 5,275.) December 31, 2020 Schedule of Note Discount Amortization Interest Discount Revenue Amortized Cash Received...
Question 6 Martinez Corporation bought a computer on December 31, 2020, paying $29,000 down with a further $71,000 payment due on December 31, 2023. An interest rate of 9% is implicit in the purchase price. Martinez uses the effective interest method and has a December 31 year end. Martinez prepares financial statements in accordance with ASPE. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF...
On January 1, 2020 Wildhorse Co. issued five-year bonds with a face value of $760,000 and a stated interest rate of 12% payable semiannually on July 1 and January 1. The bonds were sold to yield 10%. Present value table factors are: Present value of 1 for 5 periods at 10% 0.62092 Present value of 1 for 5 periods at 12% 0.56743 Present value of 1 for 10 periods at 5% 0.61391 Present value of 1 for 10 periods at...
On December 31, 2017, Green Company rendered services to End Corporation at an agreed price of $91,844.10, accepting $36,000 down and agreeing installments of $18,000 promissory note rece ivable each December 31. Under the circums tances , the note is considered to have an appropriate imputed rate of interest of 118. accept the balance in a four equal to Instructions (a) Determine the present value of the note. (b) Prepare the journal entry to for December 31, '2017.
Marigold Corporation bought a computer on December 31, 2020, paying $35,000 down with a further $89,000 payment due on December 31, 2023. An interest rate of 8% is implicit in the purchase price. Marigold uses the effective interest method and has a December 31 year end. Marigold prepares financial statements in accordance with ASPE. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1. (a)...
Bramble Bear Inc. is a retailer of nursery furniture. On April 1, 2020, Bramble sold a nursery set to a customer and received a $3,400 3-year non-interest bearing note. Bramble has a December 31 year end and the market rate of interest is 6%. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1. Calculate the amount of the sale. Use 1. PV.1 Tables, 2....
On December 31, 2019, Wildhorse Company leased machinery from Terminator Corporation for an agreed upon lease term of 3 years. Wildhorse agreed to make annual lease payments of $14,500, beginning on December 31, 2019. The expected residual value of the machinery at the end of the lease term is $7,250. Wildhorse guarantees a residual value of $7,250 at the end of the lease term, which equals the expected residual value of the machinery. What amount will Wildhorse record as its...
On December 31, 2019, Wildhorse Company leased machinery from Terminator Corporation for an agreed upon lease term of 3 years. Wildhorse agreed to make annual lease payments of $14,500, beginning on December 31, 2019. The expected residual value of the machinery at the end of the lease term is $7,250. Wildhorse guarantees a residual value of $7,250 at the end of the lease term, which equals the expected residual value of the machinery. What amount will Wildhorse record as its...
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...