On January 1, 2019, Love Co. sold merchandise to Kit Store in exchange for a non-interest bearing note requiring 10 annual payments of 100,000. Kit Store made the first payment on December 31, 2019. The prevailing market interest rate for similar notes is 8%. a. How much is the value of notes receivable as of December 31, 2020?  b. How much is the Interest income recognized during 2020

Q: On February 1st, 2021, Seen This Before Inc. (STB) accepted a non-interest-bearing note from its…

A: GIVEN   On February 1st, 2021, Seen This Before Inc. (STB) accepted a non-interest-bearing note from…

Q: On May 20, 2021, Gordon Company discounted with recourse a P75,000, 90-day, 8% note that was…

A: Maturity value of the note = Face value of note + interest = P75,000 + (P75,000*8%*90/360) = P75,000…

Q: Lincoln Company purchased merchandise from Grandville Corp. on September 30, 2018. Payment was…

A: Given information is: Lincoln Company purchased merchandise from Grandville Corp. on September 30,…

Q: On June 30, 2020, OPQ Company discounted at the bank a customer P6,000,000, 6-month, 10% note…

A: Note receivable: It can be defined as an asset that represents a right on part of the holder to…

Q: On April 1, 2020, Shalimar Company discounted with recourse a 9-month, 10% note dated January 1,…

A: Accounting: Accounting is a system, or a process of collecting and organizing economic transactions,…

Q: Note Company provided the following information on its notes payable as of December 31, 2020: Note…

A: Liability is a sum of money an individual or organization owns. Current liabilities are an…

Q: On January 1, 2019, Johnson Corporation issued a 2-year note due December 31, 2020, with a face…

A: Bonds are considered a financial instrument used to raise finance for the organization. It is also…

Q: On November 1, 2021, FN Trading accepted a 90-day, 8% P9,000,000 note from ABC Co. FN immediately…

A: Given data, Face value=P9,000,000 Bank processing fee =P80,000     Maturity value of the note = Face…

Q: MCM Company issued a note receivable to a customer on September 1, 2020. The face value of the note…

A: Note receivable is considered as a negotiable instrument. It represents the claim amount due on the…

Q: On November 1, 2021, FDN Trading accepted a 90-day, 8% P7,000,000 note from ABC Co. FDN immediately…

A: Maturity value of the note = Face value of the not + Interest on the note = 7000000 +…

Q: The trial balance for BLUE Corporation prepared at December 31, 2020 showed a balance of P4,000,000…

A: Notes receivable refers to the promissory note issued by the debtor for the credit purchase made by…

Q: On April 1, 2020, Aljean Company discounted with recourse a 9-month, 10% note dated January 1, 2020…

A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms.…

Q: On September 1, 2021, Middleton Corp. lends cash and accepts a $10,000 note receivable that offers…

A: Interest revenue Middleton Corp. will report during 2022 = Face value of note receivable x rate of…

Q: On January 1, 2021, The Barrett Company purchased merchandise from a supplier. Payment was a…

A: Present value:   The value of today’s amount to be paid or received in the future at a compound…

Q: A 180-day promissory note was issued by FDNACCT Co. on November 1, 2021 in exchange of goods bought…

A: Interest income is the amount of money received as an interest either from an investment, bonds, or…

Q: On May 1, 2014, Nico Company sold merchandise to Customer Francis and received a P26,400 (face…

A: Present value of note receivable on May 1, 2014 = Face value of note x present value factor (10%, 1…

Q: On April 1, 2020, Rasheed Company assigns $400,000 of its accounts receivable to the Third National…

A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms.…

Q: The trial balance for BLUE Corporation prepared at December 31, 2020 showed a balance of P4,000,000…

A: Interest income on the non-interest-bearing note is calculated by applying the market interest rate…

Q: On January 1, 2020, Hamid Company sold goods to Khaled Company. Khaled signed a noninterest-bearing…

A: Present value of amount to be receved on January 1, 2020 = Intial payment + Annual payment x PV of…

Q: On January 1, 2019, Diggs Co. lends some money in exchange for a 10% $100,000 10-year note. The…

A: Solution d: Note Amortization Schedule - Effective interest method Date Cash Paid Interest…

Q: On April 1, 2020, Aljean Company discounted with recourse a 9-month, 10% note dated January 1, 2020…

A: The amount received from the note receivable discounting on April, 1 2020:   (P) Principal…

Q: Harmony Corp. received the following promissory notes from various customers during 2020 in the…

A: Introduction:- Calculation of the total interest income to be recorded by Harmony Corp. during 2020…

Q: On January 1, 2021, NOBLE Company sold goods in exchange for a P5,000,000, 1- year,…

A: Discount on notes = Face value of note x market rate of interest x no. of months/12 = P5000000 x 12%…

Q: On June 30, 2020, GHI Company discounted at the bank a customer P6,000,000, 6-month, 10% note…

A: A note receivable is an instrument that promises the holder of the note a certain amount of sum…

Q: On January 1, 2018, The Barrett Company purchased merchandise from a supplier. Payment was a…

A: Given values: Note period = 5 years. Annual payment = $ 20000 Lump sum payment = $ 100000

Q: Seifert Supply Company sold merchandise to a customer on December 1, 2020 for $100,000. The…

A: Note means an instrument acknowledging as debt due from one party to another party. It carry defined…

Q: On January 1, 2019, Love Co. sold merchandise to Kit Store in exchange for a non-interest bearing…

A: Value of notes receivable as of January 1, 2019 = Annual payment x PVIAF (8%, 10 years) = P100,000 x…

Q: On April 1, 2020, Ironmon Company discounted with recourse a 9-month 10% note dated January 1, 2020…

A: Interest accrued = Face value of note x rate of interest x no. of months /12 = P6000000 x 10%  x…

Q: How much cash did Thunder Company receive from the bank? *

A: Given information is: On September 1, 2020, Thunder Company received an P80,000, 12%, 120-day note…

Q: On December 31, 2017, Firth Company borrowed $62,092 from Paris Bank, signing a 5-year, $100,000…

A: (a) Prepare the entry (if any) to record the impairment of the loan on December 31, 2019, by Paris…

Q: On January 1, 2021, Mahogany Company issued a note with a face amount of P2,000,000. The note…

A: Bond Value  2000000   coupon rate 10%   Market rate 12.50% Coupon payable every year end for…

Q: On July 1, 2017, KYU Co. discounted a 90-day, P850,000, 12% note, received from a customer on June…

A: Bills of exchange: Bills of exchange or notes are prepared for the smooth functioning of trade.…

Q: The trial balance for BLUE Corporation prepared at December 31, 2020 showed a balance of P4,000,000…

A: Carrying value of the non-interest bearing promissory note is calculated by discounting the face…

Q: On July 1, 2020, Jolly Company sold goods in exchange for P2,000,000, 8-month, noninterest-bearing…

A: The notes receivable is an account in the balance sheet generally under the current assets if the…

Q: Nova Company reported the following receivables on December 31, On June 1, 2018, Yola Company loaned…

A: The amount of interest that has been recognized as revenue but has not yet been paid by the borrower…

Q: PINK Company reported a 10% note payable of ₱3,600,000 on June 30, 2021. The note is dated October…

A: Accrued interest is the amount of bond interest that has accumulated since the last time a bond…

Q: On September 1, 2020, Sunland Company issued a note payable to Fidelity Bank in the amount of…

A: Principal outstanding on December 31,  2021 = Total amount of Notes payable - Instalment payment…

Q: Lathrop has a 5%, $40,000 note receivable from the sale of merchandise on January 1, 2020. The note…

A: The collectibility of  note = $15000 which is after end of 4th year from December 31,2020

Q: The Field Detergent Company sold merchandise to the Abel Company on June 30, 2021. Payment was made…

A: Time value of money: Time value of money refers to the concept that the value of money available at…

Q: On december 31, 2017, Precious Company sold an equipment with carrying amount of 2,000,000 and…

A: Solution Given Annual payment 500000 Number of years 10 years Note issue date…

Q: On July 31, 2020, Clear Company discounted at the bank a customer's P600,000 interest-bearing note,…

A: Net Proceeds from discounted note = Maturity Value - Discount on note

Q: The trial balance for BLUE Corporation prepared at December 31, 2020 showed a balance of P4,000,000…

A: The carrying value of the notes receivable is the sum of the notes receivable initially recognized…

Q: On June 1, 2021, Dirty Harry Co. borrowed cash by issuing a 6-month noninterest-bearing note with a…

A: Carrying value of note on June 1, 2021 is = Face/Maturity value of note - Discount on note

Q: A company sold goods to a customer in exchange for a 5-year, zero-interest-bearing note on January…

A: Face Value of Notes Receivable=$308,000 Interest Rate = 10% The goods sold in exchange for a 5 year…

Q: Rain T-Shirts issued a $440,600 note on January 1, 2018 to a customer, Larry Potts, in exchange for…

A: Journal entry is the entry made in Journal books; it is also called books of Original entry. Both…

Q: On Dec 30, 2020 Fox purchased a machine from Grisley Corp in exchange for a zero-interest bearing…

A: Number of Payments= 8 Down payment date= Dec 30, 2020 (Ist payment date) Rate of Interest= 11%…

Q: Beverly Place received a three-year, non-interest-bearing trade note for P50,000 on January 1, 2021.…

A: Note means an instrument acknowledging as debt due from one party to another party. It carry defined…

Q: Clancy Co. accepted a two-year noninterest-bearing note for $1,166,400 on January 1, 2020. The note…

A:

Q: Max Corp. sold goods for $36,000 on July 17, 2020, and accepted a 12%, 90-day note. On August 1, the…

A: Meaning of Journal Entries:                   Journal entries are the record of business…

Q: FDN Trading received the following promissory notes from various customers during 2020 in the course…

A: Introduction:- The following formula used to calculate Interest income on promise notes as follows:-…