In 2021, TUC Inc. guaranteed a bank loan of ATT Corp. ATT Corp has made all the required loan payments and the bank loan has a balance of 4,000,000 as of December 31, 2021. What provision should TUC Inc. recognize on December 31, 2021?
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In 2021, TUC Inc. guaranteed a bank loan of ATT Corp. ATT Corp has made all the required loan payments and the bank loan has a balance of 4,000,000 as of December 31, 2021. What provision should TUC Inc. recognize on December 31, 2021?
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- On January 1, 2019, Park Company accepted a 36,000, non-interest-bearing, 3-year note from a major customer in exchange for used equipment. The equipment had originally cost Park 200,000 and had a book value of 20,000 on the date of the sale. At the 12% imputed interest rate for this type of loan, the present value of the note is 25,500 on January 1, 2019. Park uses the effective interest rate. What is the carrying value of the note receivable on Parks December 31, 2019, balance sheet? a. 28,560 b. 29,000 c. 32,500 d. 36,000On 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. 6,000Interest-Bearing and Non-Interest-Bearing Notes On December 11, 2019, Hooper Inc. made a credit sale to Marshall Company and required Marshall to sign a 12,000,60-day note. Required: Prepare the journal entries necessary to record the receipt of the note by Hooper, the accrual of interest on December 31, 2019, and the customers repayment on February 9, 2020, assuming: 1. Interest of 12% was in addition to the face value of the note. 2. The note was issued as a 12,000 non-interest-bearing note with a present value of 11,765. The implicit interest rate on the note receivable was 12%. Assume a 360-day year. (Round to the nearest dollar.)
- Non-Interest-Bearing Notes Payable On November 16, 2019, Clear Glass Company borrowed 20,000 from First American Bank by issuing a 90-day, non-interest-bearing note. The bank discounted this note at 12% and remitted the difference to Clear Glass. Required: 1. Prepare the journal entries of Clear Glass to record the preceding information, the related calendar year-end adjusting entry, and payment of the note at maturity. 2. Show how the preceding items Would be reported on the December 31, 2019, balance sheet. 3. Next Level What is Clear Glass Companys effective interest rate?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 June 30, 2019, Franz Inc. borrowed P1,800,000 for one year from the bank with an interest of 12%. As security for the loan, Franz pledged its accounts receivable amounting to P2,500,000 to the bank. The bank charged the company 8.46% of the accounts receivable pledged as service charge deducted from the amount borrowed. How much was the cash received by the company and the interest expense recognized for the year ended December 31, 2019? a. P 1,800,000; 211,500 b. P 1,548,000; 306,000 c. P 1,588,500; P 319,500 d. P 1,584,000; P 306,000 e. P 1,588,500; P 324,000 f. P 1,584,000; P 216,000
- A Bank granted a loan to a borrower in the amount of P5,000,000 on January 1, 2021, The interest rate on the loan is 10% payable annually starting December 31, 2021. The loan matures in five years on December 31, 2025. The Bank incurs P39,400 of direct loan origination cost and P10,000 of indirect loan origination cost. In addition, The Bank charges the borrower an 8-point nonrefundable loan origination fee. The carrying amount of the loan as of January 1, 2021 is The effective interest rate of the loan is (provide answer in two decimal places) The interest income to be recognized in 2021 is The carrying amount of the loan as of December 31, 2021 is1. On June 30, 2019, Franz Inc. borrowed P1,800,000 for one year from the bank with an interest of 12%. As security for the loan, Franz pledged its accounts receivable amounting to P2,500,000 to the bank. The bank charged the company 8.46% of the accounts receivable pledged as service charge deducted from the amount borrowed. How much was the cash received by the company and the interest expense recognized for the year ended December 31, 2019? A. P 1,800,000; 211,500 B. P 1,548,000; 306,000 C. P 1,588,500; P 319,500 D. P 1,584,000; P 306,000 E. P 1,588,500; P 324,000 F. P 1,584,000; P 216,000 G. None of the choicesOn January 1, 2021, a borrower was granted a loan by Qatar Bank. The loan interest is payable annually starting December 31, 2021 at an interest rate of 10%. The loan matures in five years on December 31, 2025. The principal amount of the loan is P4,000,000. The borrower was charged with origination fees in the amount of 350,000. The bank incurred P61,500 origination cost. What is the carrying amount of the loan receivable on December 31, 2021? a. 4,243,120 b. 4,000,000 c. 3,756,880 d.3,600,000
- The company obtained a loan from BPI amounting to P7,500,000 on November 1, 2020. On the same date, the company issued a 60 day, 12% promissory note to the bank. Upon closing of the company’s book on December 31, 2020, adjustment for accrued interest expense must be prepared in the amount of (assume a 360-day a year)In 2020, XYZ Co. has an existing loan in the amount of $1.5 million with an annual interest rate of 9.5%. The company provides an internal company prepared financial statement to the bank under the loan agreement. Two competing banks have offered to replace XYZ’s existing loan agreement with a new one, starting 2021. Sadaf Remo Bank has offered to loan XYZ $1.5 million at a rate of 8.5% but would require XYZ to provide financial statements that have been reviewed by an audit firm. Amaranth Bank has offered to loan XYZ $1.5 million at a rate of 7.5% but would require XYZ to provide financial statements that have been audited by an audit firm. The controller of XYZ approached an audit firm, BRONX Partners, and was given an estimated cost of $12,000 to perform a review and $20,000 to perform an audit. The controller of XYZ approached another audit firm, Essen & Co. for an estimate. Essen & Co, has quoted $15,000 to perform a review, and $30,000 to perform an audit. XYZ…In 2020, XYZ Co. has an existing loan in the amount of $1.5 million with an annual interest rate of 9.5%. The company provides an internal company prepared financial statement to the bank under the loan agreement. Two competing banks have offered to replace XYZ’s existing loan agreement with a new one, starting 2021. Sadaf Remo Bank has offered to loan XYZ $1.5 million at a rate of 8.5% but would require XYZ to provide financial statements that have been reviewed by an audit firm. Amaranth Bank has offered to loan XYZ $1.5 million at a rate of 7.5% but would require XYZ to provide financial statements that have been audited by an audit firm. The controller of XYZ approached an audit firm, BRONX Partners, and was given an estimated cost of $12,000 to perform a review and $20,000 to perform an audit. The controller of XYZ approached another audit firm, Essen & Co. for an estimate. Essen & Co, has quoted $15,000 to perform a review, and $30,000 to perform an audit. XYZ…
