On October 1, 20X1, a company purchased a piece of land by agreeing to pay the...
On October 1, 20X1, a company purchased a piece of land by agreeing to pay the seller $450,000 in two years. If the company had borrowed the money from a bank to pay the seller immediately, management estimates the bank would have required interest of 9%. Calculate the net amount of the note payable as of December 31, 20X1 (rounded to the nearest dollar).
Multiple Choice
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$388,045.
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$438,936.
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$387,278.
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$439,875.
Homework Answers
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On October 1, 20X1, a company purchased a piece of land by
agreeing to pay the...
On October 1, 20X1, a company purchased a piece of land by agreeing to pay the...
On October 1, 20X1, a company purchased a piece of land by agreeing to pay the seller $450,000 in two years. If the company had borrowed the money from a bank to pay the seller immediately, management estimates the bank would have required interest of 9%. Calculate the amount of interest expense the company would record for its year ending December 31, 20X1 (rounded to the nearest dollar). Multiple Choice $40,500. $9,289. $10,125. $8,522.
1. On October 1, 20X1, a company purchased a piece of land by agreeing to pay...
1. On October 1, 20X1, a company purchased a piece of land by agreeing to pay the seller $450,000 in two years. If the company had borrowed the money from a bank to pay the seller immediately, management estimates the bank would have required interest of 9%. For what amount should the company record the land on the date of purchase (rounded to the nearest dollar)? Multiple Choice $450,000. $412,844. $378,756. $369,000. 2. Wolf Computer exchanged a machine with a...
Please provide steps on how to solve. This is due in the next 25 minutes. Thank you! 1. On October 1, 20X1, a company pu...
Please provide steps on how to solve. This is due in the next 25 minutes. Thank you! 1. On October 1, 20X1, a company purchased a piece of land by agreeing to pay the seller $450,000 in two years. If the company had borrowed the money from a bank to pay the seller immediately, management estimates the bank would have required interest of 9%. Calculate the amount of interest expense the company would record for its year ending December 31,...
Short Company purchased land by paying $10,000 cash on the purchase date and agreeing to pay...
Short Company purchased land by paying $10,000 cash on the purchase date and agreeing to pay $10,000 for each of the next ten years beginning one-year from the purchase date. Short's incremental borrowing rate is 10%. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) The land reported on the balance sheet is closest to: Multiple Choice $100,000. $110,000. Oo oo $71,446. $38,550.
On January 1, 20X1, Local Bakery started operations. The company acquired a piece of equipment by...
On January 1, 20X1, Local Bakery started operations. The company acquired a piece of equipment by issuing a note payable on that date. The note had a below market rate of interest. Terms of the purchase of the equipment: Coupon rate Market rate Note payable $165,000 1.65% 4.70% Note term 6 years The note is due in equal annual payments of principle and interest. The company uses straight-line depreciation for book purposes. Depreciation information on the equipment: Useful life of...
Straight Industries purchased a large piece of equipment from Curvy Company on January 1, 2019. Straight...
Straight Industries purchased a large piece of equipment from Curvy Company on January 1, 2019. Straight Industries signed a note, agreeing to pay Curvy Company $400,000 for the equipment on December 31, 2021. The market rate of interest for similar notes was 8%. The present value of $400,000 discounted at 8% for three years was $317,532. On January 1, 2019, Straiqht Industries recorded the purchase with a debit to equipment for $317,532 and a credit to notes payable for $317,532....
On 1/1/X1, Gerri Corp. borrowed $450,000 by agreeing to a 9%, 9-year installment note with the...
On 1/1/X1, Gerri Corp. borrowed $450,000 by agreeing to a 9%, 9-year installment note with the bank. The note's proceeds will eventually be used to purchase a building. The journal entry to record the note is already shown in the journal below The note will be paid back in nine equal annual installment payments of $ 75,059 on December 31 of each year beginning December 31, 20X1 Required: Using the above information, prepare the journal entries to record the first...
Straight Industries purchased a large piece of equipment from Curvy Company on January 1, 2019. Straight...
Straight Industries purchased a large piece of equipment from Curvy Company on January 1, 2019. Straight Industries signed a note, agreeing to pay Curvy Company $400,000 for the equipment on December 31, 2021. The market rate of interest for similar notes was 8%. The present value of $400,000 discounted at 8% for three years was $317,532. On January 1, 2019, Straight Industries recorded the purchase with a debit to equipment for $317,532 and a credit to notes payable for $317,532....
On January 1, 20X1, Local Bakery started operations. The company acquired a piece of equipment by...
On January 1, 20X1, Local Bakery started operations. The company acquired a piece of equipment by issuing a note payable on that date. The note had a below market rate of interest. Terms of the purchase of the equipment: Coupon rate Market rate Note payable $200,000 1.30% 5.90% Note term 6 years The note is due in equal annual payments of principle and interest. The company uses straight-line depreciation for book purposes. Depreciation information on the equipment: Useful life of...
1. Lynda Inc. purchased a piece of equipment for $15,000. Additional costs include transportation, $300; installation,...
1. Lynda Inc. purchased a piece of equipment for $15,000. Additional costs include transportation, $300; installation, $700; test run, $1,000; and insurance from the date that the equipment begins productive output, $1,200. What is the capitalized amount of the equipment? a. $17,000 b. $18,200 c. $16,000 d. $15,000 2. Albany Inc. purchased land for S100,000. It paid $20,000 to raze an old building and it received $2,000 for salvage of materials. What is the cost of the land? a $100,000...
Short Company purchased land by paying $10,000 cash on the purchase date and agreeing to pay $10,000 for each of the next ten years beginning one-year from the purchase date. Short's incremental borrowing rate is 10%. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) The land reported on the balance sheet is closest to: Multiple Choice $100,000. $110,000. Oo oo $71,446. $38,550.
Straight Industries purchased a large piece of equipment from Curvy Company on January 1, 2019. Straight Industries signed a note, agreeing to pay Curvy Company $400,000 for the equipment on December 31, 2021. The market rate of interest for similar notes was 8%. The present value of $400,000 discounted at 8% for three years was $317,532. On January 1, 2019, Straiqht Industries recorded the purchase with a debit to equipment for $317,532 and a credit to notes payable for $317,532....
On 1/1/X1, Gerri Corp. borrowed $450,000 by agreeing to a 9%, 9-year installment note with the bank. The note's proceeds will eventually be used to purchase a building. The journal entry to record the note is already shown in the journal below The note will be paid back in nine equal annual installment payments of $ 75,059 on December 31 of each year beginning December 31, 20X1 Required: Using the above information, prepare the journal entries to record the first...
Straight Industries purchased a large piece of equipment from Curvy Company on January 1, 2019. Straight Industries signed a note, agreeing to pay Curvy Company $400,000 for the equipment on December 31, 2021. The market rate of interest for similar notes was 8%. The present value of $400,000 discounted at 8% for three years was $317,532. On January 1, 2019, Straight Industries recorded the purchase with a debit to equipment for $317,532 and a credit to notes payable for $317,532....
1. Lynda Inc. purchased a piece of equipment for $15,000. Additional costs include transportation, $300; installation, $700; test run, $1,000; and insurance from the date that the equipment begins productive output, $1,200. What is the capitalized amount of the equipment? a. $17,000 b. $18,200 c. $16,000 d. $15,000 2. Albany Inc. purchased land for S100,000. It paid $20,000 to raze an old building and it received $2,000 for salvage of materials. What is the cost of the land? a $100,000...
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