On January 2, 2020, Brook Company acquired machinery by Issuing a 5%, $350,000 note due in 5 years on December 31, 2024. Annual payments are $81,099 each December 31. The payment schedule is: Year 2020 2021 2022 2023 2024 Annual Payment $81,099 81,099 81,099 81,099 81,099 Principal Portion of Payment $63,599 66,779 70,118 73,624 75,880 Current liabilities Current portion of non-current debt Interest payable Non-current liabilities Long-term debt Interest Portion of Payment $17,500 14,320 10,981 7,475 5,219 2020 Required: Using the information provided, complete the following liabilities section of Brook Company's balance sheet at December 31: (Leav no cells blank - be certain to enter "0" wherever required.) $ 1,599 $ December 31, 2021 Principal Balance at Year-End $286,401 219,622 149,504 75,880 66 0 2022 2023 75,880

On January 2, 2020, Brook Company acquired machinery by Issuing a 5%, $350,000 note due in 5 years on December 31, 2024. Annual payments are $81,099 each December 31. The payment schedule is: Year 2020 2021 2022 2023 2024 Annual Payment $81,099 81,099 81,099 81,099 81,099 Principal Portion of Payment $63,599 66,779 70,118 73,624 75,880 Current liabilities Current portion of non-current debt Interest payable Non-current liabilities Long-term debt Interest Portion of Payment $17,500 14,320 10,981 7,475 5,219 2020 Required: Using the information provided, complete the following liabilities section of Brook Company's balance sheet at December 31: (Leav no cells blank - be certain to enter "0" wherever required.) $ 1,599 $ December 31, 2021 Principal Balance at Year-End $286,401 219,622 149,504 75,880 66 0 2022 2023 75,880

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 10MC: On January 1, 2019, Park Company accepted a 36,000, non-interest-bearing, 3-year note from a major...

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On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10% interest rate. Each annual payment is in the amount of $39,569 and payment is due each Dec. 31. What is the journal entry on Jan. 1 to record the cash received and on Dec. 31 to record the annual payment? (You will need to prepare the first row in the amortization table to determine the amounts.)
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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. 36,000
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Hamlet Corporation purchases computer equipment at a price of 100,000 on January 1, 2019, paying 40,000 down and agreeing to pay the balance in three 20.000 annual instalments beginning December 31, 2019. It is not possible to value either the equipment or the 60,000 note directly; how-ever, Hamlet's incremental borrowing rate is 12%. Required: 1. Prepare a schedule to compute the interest expense and discount amortization on the note. 2. Prepare all the journal entries for Hamlet to record the issuance of the note, each annual interest expense, and the three annual installment payments.
Notes Receivable On January 1, 2019, Lisa Company sold machinery with a book value of 118,000 to Mark Company. Mark signed a 180,000 non-interest-bearing note, payable in three 60,000 annual installments on December 31, 2019, 2020, and 2021. The fair value of the machinery was 149,211.12 on the date of sale. The machinery had been purchased by Lisa at a cost of 160,000. Required: 1. Prepare all the journal entries on Lisas books for January 1, 2019, through December 31, 2021. 2. Prepare the notes receivable portion of Lisas balance sheet on December 31, 2019 and 2020.
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