Exercise A3-18Present Values Use Present Value Tables or your calculator to complete the requirements below. Phillips Enterprises signed notes to make the following two purchases on January 1, 2020: new piece of equipment for $60,000, with payment deferred until December 31, 2021. The appropriate interest rate is 9% compounded annually. small building from Richter Construction. The terms of the purchase require a $75,000 payment at the end of each quarter, beginning March 31, 2020, and ending June 30, 2022. The appropriate interest rate is 2% per quarter. Required: Round your answers to the nearest cent, if rounding is required. 1. Complete the information needed to prepare a cash flow diagrams for these two purchases. a. n = years i = % per year Amount of Payment or Deposit 1/1/20 12/31/21 Unknown present value amount $ b. n = quarters i = % per quarter Amount of Payment or Deposit 1/1/20 3/31/20 6/30/20 9/30/20 6/30/22 Unknown present value amount $ $ $ . . . $ Feedback Partially correct 2. Prepare the entries to record these purchases in Phillips' journal. 2020 Jan. 1 Equipment Notes Payable (Record purchase of equipment) 2020 Jan. 1 Building Notes Payable (Record purchase of building) 3. Prepare the cash payment and interest expense entries for Purchase b at March 31, 2020, and June 30, 2020. If an amount box does not require an entry, leave it blank. March 31, 2020 Interest Expense Notes Payable Cash (Record loan payment) June 30, 2020 Interest Expense Notes Payable Cash (Record loan payment) Feedback Partially correct 4. Prepare the adjusting entry for Purchase a at December 31, 2020. Dec. 31, 2020 Interest Expense Notes Payable (Record accrued interest expense) Feedback Partially correct

Exercise A3-18Present Values Use Present Value Tables or your calculator to complete the requirements below. Phillips Enterprises signed notes to make the following two purchases on January 1, 2020: new piece of equipment for $60,000, with payment deferred until December 31, 2021. The appropriate interest rate is 9% compounded annually. small building from Richter Construction. The terms of the purchase require a $75,000 payment at the end of each quarter, beginning March 31, 2020, and ending June 30, 2022. The appropriate interest rate is 2% per quarter. Required: Round your answers to the nearest cent, if rounding is required. 1. Complete the information needed to prepare a cash flow diagrams for these two purchases. a. n = years i = % per year Amount of Payment or Deposit 1/1/20 12/31/21 Unknown present value amount $ b. n = quarters i = % per quarter Amount of Payment or Deposit 1/1/20 3/31/20 6/30/20 9/30/20 6/30/22 Unknown present value amount $ $ $ . . . $ Feedback Partially correct 2. Prepare the entries to record these purchases in Phillips' journal. 2020 Jan. 1 Equipment Notes Payable (Record purchase of equipment) 2020 Jan. 1 Building Notes Payable (Record purchase of building) 3. Prepare the cash payment and interest expense entries for Purchase b at March 31, 2020, and June 30, 2020. If an amount box does not require an entry, leave it blank. March 31, 2020 Interest Expense Notes Payable Cash (Record loan payment) June 30, 2020 Interest Expense Notes Payable Cash (Record loan payment) Feedback Partially correct 4. Prepare the adjusting entry for Purchase a at December 31, 2020. Dec. 31, 2020 Interest Expense Notes Payable (Record accrued interest expense) Feedback Partially correct

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA3: Time Value Of Money

Section: Chapter Questions

Problem 14E: Future Values and Long-Term Investments Portman Corporation engaged in the following transactions...

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Exercise A3-18
Present Values

Use Present Value Tables or your calculator to complete the requirements below.

Phillips Enterprises signed notes to make the following two purchases on January 1, 2020:

new piece of equipment for $60,000, with payment deferred until December 31, 2021. The appropriate interest rate is 9% compounded annually.
small building from Richter Construction. The terms of the purchase require a $75,000 payment at the end of each quarter, beginning March 31, 2020, and ending June 30, 2022. The appropriate interest rate is 2% per quarter.

Required:

Round your answers to the nearest cent, if rounding is required.

1. Complete the information needed to prepare a cash flow diagrams for these two purchases.

a.	n =	years
	i =	% per year

Amount of Payment or Deposit	1/1/20	12/31/21
	Unknown present value amount	$

b.	n =	quarters
	i =	% per quarter

	Amount of Payment or Deposit
1/1/20	3/31/20	6/30/20	9/30/20		6/30/22
Unknown present value amount	$	$	$	. . .	$

Feedback

Partially correct

2. Prepare the entries to record these purchases in Phillips' journal.

2020 Jan. 1	Equipment
	Notes Payable
	(Record purchase of equipment)
2020 Jan. 1	Building
	Notes Payable
	(Record purchase of building)

3. Prepare the cash payment and interest expense entries for Purchase b at March 31, 2020, and June 30, 2020. If an amount box does not require an entry, leave it blank.

March 31, 2020	Interest Expense
	Notes Payable
	Cash
	(Record loan payment)
June 30, 2020	Interest Expense
	Notes Payable
	Cash
	(Record loan payment)

Feedback

Partially correct

4. Prepare the adjusting entry for Purchase a at December 31, 2020.

Dec. 31, 2020	Interest Expense
	Notes Payable
	(Record accrued interest expense)

Feedback

Partially correct

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