Crane Corp. owes $ 283,000 to Cheyenne Trust. The debt is a 10-year, 12% note due December 31, 2020. Because Crane Corp. is infinancial trouble, Cheyenne Trust agrees to extend the maturity date to December 31, 2022, reduce the principal to $ 236,000, andreduce the interest rate to 6%, payable annually on December 31.(a)Prepare the journal entries on Crane's books on December 31, 2020, 2021, 2022.(b)Prepare the journal entries on Cheyenne Trust's books on December 31, 2020, 2021, 2022.Click here to view factor tables.(Round present value factor calculations to 5 decimal places, eg. 1.25124 and the final answer to O decimal places eg. 58,971. If no entry isrequired, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount isentered. Do not indent manually.) DebitCredit(b) Date Account Titles and ExplanationCheyenne Trust's2020Bad Debt ExpenseAllowance for Doubtful Accounts2021CashAllowance for Doubtful AccountsInterest Revenue2022CashAllowance for Doubtful AccountsInterest Revenue(To record Interest Revenue)CashAllowance for Doubtful AccountsInterest Revenue(To record maturity of Notes Receivable)

Sometimes there comes a situation in which the creditor will not be able to pay the amount due from…

Answered: Crane Corp. owes $ 283.000 to Cheyenne…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 30E

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Similar questions

On July 1, 2019, Aldrich Company purchased as an available-for-sale security 200,000 face value, 9% U.S. Treasury notes for 194,000. The notes mature July 1, 2020, and pay interest semiannually on January 1 and July 1. The notes were sold on December 1, 2019, for 199,000. Aldrich normally uses straight-line amortization on all of its notes. In its income statement for the year ended December 31, 2019, what amount should Aldrich report as a gain on the sale of the available-for-sale security? a. 2,500 b. 3,500 c. 5,000 d. 6,000
Spath Company borrows 75,000 by issuing a 4-year, noninterest-bearing note to a customer on January 1, 2019. In addition, Spath agrees to sell inventory to the customer at reduced prices over a 5-year period. Spaths incremental borrowing rate is 12%. The customer agrees to purchase an equal amount of inventory each year over the 5-year period so that a straight-line method of revenue recognition is appropriate. Required: Prepare the journal entries on Spaths books for 2019 and 2020. (Round answers to 2 decimal places.)
On January 1, 2019, Boater Company issues a 20,000 non-interest-bearing, 5-year note for equipment. Neither the fair value of the note nor the equipment is determinable. Boaters incremental borrowing rate is 9%. The asset has a useful life of 7 years. Prepare the journal entry for Boater to record the issuance of the note on January 1.
On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10% interest rate. Each annual payment is in the amount of $39,569 and payment is due each Dec. 31. What is the journal entry on Jan. 1 to record the cash received and on Dec. 31 to record the annual payment? (You will need to prepare the first row in the amortization table to determine the amounts.)
Short-Term Debt Expected to Be Refinanced On December 31, 2019, Excello Electric Company had 1 million of short-term notes payable due February 7, 2020. Excello expected to refinance these notes on a long-term basis. On January 15, 2020, the company issued bonds with a face value of 900,000 for 882,000. On January 22, 2020, the proceeds from the bond issue plus additional cash held by Excello on December 31, 2019, were used to liquidate the 1 million of short-term notes. The December 31, 2019, balance sheet is issued on February 12, 2020. Required: Prepare a partial balance sheet as of December 31, 2019, showing how the 1 million of short-term notes payable should be disclosed. Include an appropriate footnote for proper disclosure.

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