January 1, 2021, Dreamlover Corporation purchased equipment from Daydream Company for P3,600,000. Term of payments includes issuing a 5-year noninterest-bearing note payable equally every end of the year. The effective interest rate is 15%. The entity used 2 decimal places for the PVF.
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On January 1, 2021, Dreamlover Corporation purchased equipment from Daydream Company for P3,600,000.
Term of payments includes issuing a 5-year noninterest-bearing note payable equally every end of the year.
The effective interest rate is 15%.
The entity used 2 decimal places for the PVF.
Required:
Prepare an amortization table
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- Sharapovich Inc. borrowed $50,000 from Kerber Bank and signed a 5-year note payable stating the interest rate was 5% compounded annually. Sharapovich Inc. will make payments of $11,548.74 at the end of each year. Prepare an amortization table showing the principal and interest in each payment.On January 1, 2021, Palalay Bus Co. received a 4-year, noninterest bearing note of P1,000,000 in exchange for land with carrying amount of P400,000. The note is due on December 31, 2024. The effective interest rate is 12%. The present value of 1 at 12% for 4 periods is 0.6355.Requirements: 1. Prepare the amortization table. 2. Provide all the necessary journal entries.On January 1, 2021, Dreamlover Corporation purchased equipment from Daydream Company for P3,600,000. Term of payments includes issuing a 5-year noninterest-bearing note payable equally every end of the year. The effective interest rate is 15%. The entity used 2 decimal places for the PVF. Requirements: How much is the initial cost of the equipment?
- On January 1, 2020, South Company purchased five delivery trucks for P 10,000,000 from West Company.South Company gave West Company 1 year non-interest bearing note (stated interest/nominal interest rate is 0) payable on January 1, 2021. At the date of purchase, the interest rate for this type of purchase is 13%. Round present value factors to four decimal places. Prepare an amortization table. Required: 1. What is the amount of Notes Payable that shall be reflected in the statement of financial position on December 31, 2020?______________ 2. What is the interest expense that shall be reported in the statement of financial performance on December 31, 2020?____________________On January 1, 2020, South Company acquired a building for P5,000,000. The entity paid P500,000 down and signed a noninterest bearing note for the balance which is payable in 3 equal annual installments every December 31 of each year. The prevailing interest rate for a note of this type is 12%. The present valueof an ordinary annuity of 1 for three periods is 2.4018. Required: Prepare Journal entries to record purchase of building on January 1, 2020, first installment payment on December 31, 2020 and interest for 2020.On January 1, 2020, South Company acquired a building for 5,000,000. The entity paid 500,000 down and signed a noninterest bearing note for the balance which is payable in 3 equal annual installments every December 31 of each year. The prevailing interest rate for a note of this type is 12%. The present value of an ordinary annuity of 1 for three periods is 2.4018. Required: 1. Prepare journal entries to record purchase of building on January 1, 2020, first installment payment on December 31, 2020 and interest expense for 2020.
- On January 1, 20X1 Blu Corporation acquired a building for P10M. The entity paid P1M down and signed a non-interest bearing note for the balance. Note is payable in 3 equal annual installment every Dec 31. Prevailing rate for the note of this type is 12%. REQUIRED: Journal entries to record the purchase of the building up to the settlement of the note. Prepare an amortization table. How should the note be presented in the statement of financial position at Dec 31, 20X1?PREPARE AN AMORTIZATION TABLE AND FIND HOW MUCH IS THE NET PROCEEDS FOR THE FOLLOWING CASES: Case 2: On January 1, 2020 Square company purchase a property by issuing 15% promissory note with face amount of 5,000,000 to yield 12% interest and principal payable annually for 5 years.On January 1, 2020, Physanto Corp. received in exchange for equipment sold to Viva Inc., an 8% $500,000 note that matures in January 2024. The market rate of interest for similar notes is 12%. Interest is received semi-annually each July 1 and January 1. Round all values to the nearest whole number. Required: A. Complete the partial amortization schedule provided. Place zero in any field that does not require a computed value.
- On January 1, 2021, Stoops Entertainment purchases a building for $550,000, paying $110,000 down and borrowing the remaining $440,000, signing a 9%, 15-year mortgage. Installment payments of $4,462.77 are due at the end of each month, with the first payment due on January 31, 2021. 2. Complete the first three rows of an amortization schedule. (Do not round intermediate calculations. Round your final answers to 2 decimal places.) Date Cash Paid Interest Expense Decrease in Carrying Value Carrying Value 01/01/2021 01/31/2021 02/28/2021On January 1, 20X1 Red Company acquired a building for P10M. The entity paid P1M down and signed a non-interest bearing note for the balance. Note is payable in 3 equal annual installment beginning Jan 1, 20X1. Prevailing rate for the note of this type is 12%. REQUIRED: Journal entries to record the purchase of the building up to the settlement of the note. Prepare an amortization table. How should the note be presented in the statement of financial position at Dec 31, 20X1?At the beginning of 2018, VHF Industries acquired a machine with a fair value of $6,074,700 by issuing a fouryear, noninterest-bearing note in the face amount of $8 million. The note is payable in four annual installmentsof $2 million at the end of each year.Required:1. What is the effective rate of interest implicit in the agreement?2. Prepare the journal entry to record the purchase of the machine.3. Prepare the journal entry to record the first installment payment at December 31, 2018.4. Prepare the journal entry to record the second installment payment at December 31, 2019.5. Suppose the market value of the machine was unknown at the time of purchase, but the market rate of interestfor notes of similar risk was 11%. Prepare the journal entry to record the purchase of the machine.