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The effective rate was not
mentioned, so no interest was taken as zero.
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NAME III. On January 1, 2016 Karel Corp. purchased a machine having a fair market value of $53.132 by issuing year...
On January 1, 2016 Karel Corp. purchased a machine having a fair market value of $53,132...
On January 1, 2016 Karel Corp. purchased a machine having a fair market value of $53,132 by issuing a four-year non-interest bearing $75,000 note. Prepare the journal entry to record the purchase and then calculate the book value of this note at fiscal year-end 2016. (Use EFFECTIVE INTEREST and show your amortization table). I saw this is already posted with an answer, but I am looking for an alternate answer as I do not think the other one is correct.
On January 1, 2009, Boston Ltd., made the following acquisitions: 1. Purchased machinery having a fair...
On January 1, 2009, Boston Ltd., made the following acquisitions: 1. Purchased machinery having a fair market value of $400,000 by issuing a four year, non-interest-bearing promissory note in the face amount of $544,196. 2. Purchased heavy equipment by issuing a nine-year, 6% promissory note having a maturity value of $325,000(interest is paid annually at December 31). The company has to pay 10% interest for funds from its bank. Required: a) Record Boston's journal entries on January 1, 2009, for...
At the beginning of 2021, VHF Industries acquired a machine with a fair value of $9,245,760...
At the beginning of 2021, VHF Industries acquired a machine with a fair value of $9,245,760 by issuing a six-year, noninterest-bearing note in the face amount of $12 million. The note is payable in six annual installments of $2 million at the end of each year. (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. What is the effective rate of...
At the beginning of 2021, VHF Industries acquired a machine with a fair value of $6,760,200...
At the beginning of 2021, VHF Industries acquired a machine with a fair value of $6,760,200 by issuing a two-year, noninterest-bearing note in the face amount of $8 million. The note is payable in two annual installments of $4 million at the end of each year. (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. What is the effective rate of...
At the beginning of 2021, VHF Industries acquired a machine with a fair value of $9,127,520...
At the beginning of 2021, VHF Industries acquired a machine with a fair value of $9,127,520 by issuing a seven-year, noninterest bearing note in the face amount of $14 million. The note is payable in seven annual installments of $2 million at the end of each year. (FVOEŠI. PV 51. EVA of S1, PVA of S1,EVAD of $1 and PVA of S1) (Use appropriate factor(s) from the tables provided.) Required: 1. What is the effective rate of interest implicit in...
At the beginning of 2018, VHF Industries acquired a equipment with a fair value of $9,112,050...
At the beginning of 2018, VHF Industries acquired a equipment with a fair value of $9,112,050 by issuing a four-year, noninterest bearing note in the face amount of $12 million. The note is payable in four annual installments of $3 million at the end of each year (Fy 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. What is the effective rate...
On January 1, 2017, Teal Company purchased 8% bonds having a maturity value of $440,000, for...
On January 1, 2017, Teal Company purchased 8% bonds having a maturity value of $440,000, for $477,069.47. The bonds provide the bondholders with a 6% yield. They are dated January 1, 2017, and mature January 1, 2022, with interest receivable January 1 of each year. Teal Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category Prepare the journal entry at the date of the bond purchase Prepare a bond amortization...
At the beginning of 2018, VHF Industries acquired a equipment with a fair value of $8,710,520...
At the beginning of 2018, VHF Industries acquired a equipment with a fair value of $8,710,520 by issuing a six-year, noninterest-bearing note in the face amount of $12 million. The note is payable in six annual installments of $2 million at the end of each year. (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. What is the effective rate of...
At the beginning of 2018, VHF Industries acquired a equipment with a fair value of $6,774,420...
At the beginning of 2018, VHF Industries acquired a equipment with a fair value of $6,774,420 by issuing a four-year, noninterest-bearing note in the face amount of $8 million. The note is payable in four annual installments of $2 million at the end of each year. (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. What is the effective rate of...
On January 1, 2017, Crane Company purchased 12% bonds, having a maturity value of $304,000, for...
On January 1, 2017, Crane Company purchased 12% bonds, having a maturity value of $304,000, for $327,047.70. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2017, and mature January 1, 2022, with interest received on January 1 of each year. Crane Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows....
At the beginning of 2021, VHF Industries acquired a machine with a fair value of $6,760,200 by issuing a two-year, noninterest-bearing note in the face amount of $8 million. The note is payable in two annual installments of $4 million at the end of each year. (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. What is the effective rate of...
At the beginning of 2021, VHF Industries acquired a machine with a fair value of $9,127,520 by issuing a seven-year, noninterest bearing note in the face amount of $14 million. The note is payable in seven annual installments of $2 million at the end of each year. (FVOEŠI. PV 51. EVA of S1, PVA of S1,EVAD of $1 and PVA of S1) (Use appropriate factor(s) from the tables provided.) Required: 1. What is the effective rate of interest implicit in...
At the beginning of 2018, VHF Industries acquired a equipment with a fair value of $9,112,050 by issuing a four-year, noninterest bearing note in the face amount of $12 million. The note is payable in four annual installments of $3 million at the end of each year (Fy 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. What is the effective rate...
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