On April 1, 2021, Leni Company (a calendar-year company) sold a tract of land that originally cost P400,000.  Leni received a P600,000 note as payment for the land.   The note is payable in three annual installments of P200,000 beginning March 31, 2022 plus interest at the rate of 4% based on the outstanding balance.  At April 1, 2021, the prevailing rate of interest for a similar obligation is 10%.  The fair value of the note is derived by discounting all future collections using the prevailing interest rate, thus, amounting to P538,424. How much is the interest revenue for the year ended December 31, 2021?

Q: Prepare the journal entry at the end of the second year to record the payment and interest. (Round…

A: Solution:- Preparation of journal entry at the end of the second year to record the payment and…

Q: On January 1, 2019, Coco Company sold a building for P5,000,000 to Macao Company. Macao Company paid…

A: Face value of note = Sale value - down payment = 5000000-50000 = P4,500,000 Annual payment = Face…

Q: On January 1, 2019, Carson Inc sold used equipment with a cost of S15,000 and a carrying amount of…

A: ANSWER   On January 1, 2019, Carson Inc sold used equipment with a cost of S15,000 and a…

Q: On January 1, 2019, Northern Manufacturing Company bought a piece of equipment by signing a…

A: Fair value of equipment = Present value of installments       Quarterly installments $20,000.00…

Q: At the beginning of 2018, VHF Industries acquired a machine with a fair value of $6,074,700 by…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub parts for…

Q: Company is to make an annual principal payment of P600,000 for 5 years plus interest at 8%. The…

A: Impairment=Carrying value of loan-present value of cash flows

Q: In 2019, Ulna Company borrowed P10,000,000 from Plenty Lending Company to finance the construction…

A: Here discuss about the details of the Restructure of the Notes Payable after incurred the financial…

Q: On January 1, 2021, Hosana Co. sold equipment in exchange for a P 850,000, 4 year, 11% note,…

A: Lets understand the basics. Compounded interest means interest on interest. In other words, it is a…

Q: On July 1, 2021, Emerald Corporation sold a set of washing machine and a dryer for a total contract…

A: As per IAS 115 any contrct which is related to the single performance obligation then it is recorded…

Q: What is the unearned interest income on January 1, 2021?

A: Investment: It is a monetary asset purchased with the idea that the asset will provide income in the…

Q: On December 31, 2019, Speedo’s Limited bought a yacht for $55,000, but made a down payment of…

A: Given, Cost of yacht= $55,000 Down payment =$10,000 Balance amount =$55000 -$10000  Balance amount…

Q: On January 1,2021, Mickey Mouse Corporation sells a Furniture and Fixtures costing P2,500,000 and…

A: Present value of the note = Annual installment x Present value factor (10% x 3 years) = P300,000 x…

Q: On January 1, 2019, Aitoes Inc. sold used equipment with a cost of S15,000 and a carrying amount of…

A: Notes receivable is used to track the money to be received from the borrower

Q: On January 1, 2019, Lala Company received an P800,000, 8%, 2 year note from Move Corporation as…

A: Annual installment = Total amount to be collected / no. of installment = 600000/3 = P200,000

Q: On January 1, 2020, Tine Company signed an agreement to operate as a franchisee of Sarawat Corp. for…

A: If the collection of franchisee income is not reasonably assured then the revenue is not recognized…

Q: On December 31, 2020, an entity sold a piece of land costing P800, 000 and received a 3-year, 3%,…

A: Working note: Computation of present value of the note receivable:

Q: On December 31, 2020, Queen Company sold an equipment with carrying amount of P2,000,000 and…

A: The notes receivable is an asset account in the balance sheet of an organization. It is recorded…

Q: Chippewas Inc. has decided to purchase equipment from Central Michigan Industries on January 2,…

A: Chippewas issues $ 800000 market interest rate = 12% installments = 5 each installment = 160000…

Q: On July 1, 2021, Emerald Corporation sold a set of washing machine and a dryer for a total contract…

A: Revenue to be recognized on this contract on July 1, 2021 = Lumpsum price of washing machine and…

Q: On January 1, 2019, Northern Manufacturing Company bought a piece of equipment by signing a…

A: Notes payable are long-term commitments that indicate the amount of money owing by a company to its…

Q: On January 2, 2026, a tract of land that originally cost P800,000 was sold by SIMBAJON CORPORATION.…

A: Given, Land sold @ P 1200000 With payment due on annual installment - P400000 + interest for the…

Q: On January 01, 2021, Black Corporation issued a three-year, non-interest bearing note with face…

A: Notes Payable, net of discount, reported as current liability as of December 31, 2021= annual…

Q: On January 1, 2020, Pedro Company sold land that originally cost P400,000 to Buyer Company. As…

A: Answer -  Part 4 - Calculation of the correct carrying amount of the notes receivable at December…

Q: On December 31, 2021, RAP, Inc. authorized JIN to operate as a franchisee for an initial franchise…

A: For the revenue that is earned, the services will be considered to have been provided and the…

Q: On October 1, 2021, Chrysanthemum Co. purchased equipment by issuing a four-year, 9% promissory note…

A: Lets understand the basics. When any asset is purchase against notes payable then asset needs to be…

Q: On January 1, 2020, South Company acquired a building for P5,000,000. The entity paid P500,000 down…

A: It is pertinent to note that the fair value of note is the present value of all the cash outflows…

Q: On January 1, 2020, Gibson Co. purchases equipment having a fair value of $200,000 by issuing a…

A: Zero coupon bonds means those bonds which were issued for money or any assets but for which no…

Q: At the beginning of 2021, VHF Industries acquired a machine with a fair value of $6,074,700 by…

A: 1.

Q: On June 30, 2022, Making Waves, LLC, purchased land for $400,000 and a building for $560,000, paying…

A: Installment Note: An installment note is an obligation or liability that requires the borrower to…

Q: On January 1, 2021, South Company acquired a building for P5,000,000. The entity paid P500,000 down…

A: The question is related to Journal entries to record purchase of Building by signed non interest…

Q: On October 1, 2020, ABC Manufacturing sold a tract of land that originally cost P400,000.  ABC…

A: Present value of the Note on October 1, 2020 = Present value of principal + Present value of…

Q: Prepare an amortization table. Prepare all journal entries to record the transactions from January…

A: Year Opening balance Installment Interest Total Cash flow Closing balance 2020    60,00,000…

Q: On January 1, 2020, Pedro Company sold land that originally cost P400,000 to Buyer Company. As…

A: Answer -  Part 1  - PV of consideration receivable (see computation b            503,105Carrying…

Q: On July 01, 2021, Emerald Corporation sold a set of washing machine and a dryer for a total contract…

A: Interest- The sum that the borrower pays to the lender above the principal amount and is fixed at a…

Q: On May 1, 2018, the DCM issued a 9% promissory note with a face value of ₱8,339,760 for a piece of…

A: Formula: Maturity value of note = Principal amount + Interest amount.

Q: On January 1, 2020, Magbaril Company sold equipment with a carrying amount of P800,000 to Macud…

A: On 01.01.2020, Magbaril company sold equipment to Macud company. Carrying value of equipment =…

Q: On July 1, 2021, Kiko Company (a calendar-year company) sold a tract of land that originally cost…

A: First we should calculate carrying value of note on June 30, 2022 = Fair value on date of issue +…

Q: On January 1, 2019, Daisy company signed an agreement to operate as a franchisee for an initial…

A: Total amount of franchise = Present value of future installments + Down payment = Annual…

Q: Anxious Company acquired two items of machinery. On December 31, 2020, Anxious Company purchased a…

A: Note means an instrument issued by company acknowledging the debt due from company to bond holder.…

Q: On April 1, 2021, John Vaughn purchased appliances from the Acme Appliance Company for $1,000. In…

A: Purchased Amount = $1,000 Time Period = 18 Months Annual Interest Rate = 24%

Q: On January 1, 2021, My Universe Corporation issued a three-year, non-interest bearing note with face…

A: Solution: Interest expense for 2021 = P2,400,000 * 12.0444% = P289,066 Payments at the end of 2021 =…

Q: On July 1, 2021, Kiko Company (a calendar-year company) sold a tract of land that originally cost…

A: Interest accrued on December 31, 2021 = Face value of note x rate of interest x no. of months/12 =…

Q: On January 2021 Bob Company sells an item of machinery to Jaison Company for its fair value of…

A:

Q: On July 1, 2021, Emerald Corporation sold a set of washing machine and a dryer for a total contract…

A: Solution: Total amount interest earned in 2021 = ($160,000*2%) + ($160,000 + $3,200 - $28,564) * 2%…

Q: On Dec. 31, 2020, Boss Company purchased a machine from Len Company in exchange for a noninterest…

A: Note means an instrument issued by company acknowledging the debt due from company to bond holder.…

Q: On January 1, 2021, My Universe Corporation issued a three-year, non-interest bearing note with face…

A: 12 months from the end of reporting period date. in this case reporting period date is 31 dec 2021

Q: On January 1, 2019, James Co. received a 10%, five year note from a customer. Interest is paid every…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: On January 2, 2019, Grey Company received an P800,000, 8%, 2 year note from Black Corporation as…

A: Impairment loss is the excess of carrying amount over the recoverable amount of the notes…

Q: On January 1, 2021, My Universe Corporation issued a three-year, non-interest bearing note with face…

A: Current Liabilities - It is amount of debt obligations which are to be paid within one year by the…