On January 2, 2024, the Midwestern Steam Gas Corporation purchased an industrial furnace. In payment, Midwestern signed a noninterest - bearing note requiring $50,000 to be paid on December 31, 2025 (two years later). If Midwestern had borrowed cash to buy the furnace, the bank would have required an interest rate of 10% . Required: Record the journal entry for Midwestern for 1/2/2024, 12/31/2024, and 12/31/2025.
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![On January 2, 2024, the Midwestern Steam Gas Corporation purchased an industrial furnace.
In payment, Midwestern signed a noninterest - bearing note requiring $50,000 to be paid on
December 31, 2025 (two years later). If Midwestern had borrowed cash to buy the furnace,
the bank would have required an interest rate of 10% . Required: Record the journal entry for
Midwestern for 1/2/2024, 12/31/2024, and 12/31/2025.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F21a27074-e8be-4b86-b908-0980c572a6fd%2F80e0cb24-d122-445b-a0ed-5cdac609a904%2Fwvxqpa98_processed.png&w=3840&q=75)
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- On January 1, 2024, Evanston Corporation borrowed $7 million from a local bank to construct a new building over the next three years. The loan will be paid back in three equal installments of $2,570,460 on December 31 of each year. The payments include interest at a rate of 5%. Required: 1. Record the cash received when the note is issued. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Enter your answer in dollars, not millions (i.e., $5.5 million should be entered as 5,500,000).) View transaction list Journal entry worksheet < 1 Record the receipt of cash from the issue of the note payable. Note: Enter debits before credits. Date January 01, 2024 Cash Notos Davahin General Journal Debit CreditOntario Resources, a natural energy supplier, borrowed $79.6 million cash on November 1, 2024, to fund a geological survey. The loan was made by Quebec Banque under a short-term financing arrangement. Ontario Resources issued a 6-month, 12% promissory note with interest payable at maturity. Ontario Resources' fiscal period is the calendar year. Required: 1. Prepare the journal entry for the issuance of the note by Ontario Resources. 2. & 3. Prepare the appropriate adjusting entry for the note by Ontario Resources on December 31, 2024 and journal entry for the payment of the note at maturity.A bank loan of $800,000 was obtained byPWP Ltd on 1 August 2020 to purchase itsbusiness office, warehouse and factory andan upfront establishment fee of $8,000 waspaid on that date. The period of the loan waseight years and the bank charged interest atthe rate of 10 percent. 1.Explain what deductions are available to PWP for2020/21 in relation to the establishment fee andinterest paid on the bank loan. 2.What deductions would be available if PWP repaidthe $500,000 loan in full-on 30 June 2022?
- On July 31, 2025, Wildhorse Company engaged Minsk Tooling Company to construct a special-purpose piece of factory machinery. Construction began immediately and was completed on November 1, 2025. To help finance construction, on July 31 Wildhorse issued a $284,400, 3-year, 10% note payable at Netherlands National Bank, on which interest is payable each July 31. $183,400 of the proceeds of the note was paid to Minsk on July 31. The remainder of the proceeds was temporarily invested in short-term marketable securities (trading securities) at 8% until November 1. On November 1, Wildhorse made a final $101,000 payment to Minsk. Other than the note to Netherlands, Wildhorse's only outstanding liability at December 31, 2025, is a $31,200, 6%, 6-year note payable, dated January 1, 2022, on which interest is payable each December 31. (a) Calculate weighted-average accumulated expenditures, avoidable interest, and total interest cost to be capitalized during 2025. Weighted-average accumulated…On September 1, 2024, Triton Entertainment borrowed $24 million cash to fund a new Fun Park. The loan was made by Nevada Bank under a noncommitted short-term financing arrangement. Triton issued a 9-month, 12% promissory note. Interest was payable at maturity. Triton's fiscal period is the calendar year. Required: 1. Prepare the journal entry for the issuance of the note by Triton. 2. Prepare the appropriate adjusting entry for the note by Triton on December 31, 2024. 3. Prepare the journal entry for the payment of the note at maturity. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars and not in millions. No 1 Transaction 1 Cash Notes payable 2 2 Interest expense Notes payable 3 3 General Journal > > × Debit Credit 24,000,000 24,000,000 960,000 960,000On November 1, 2021, Quantum Technology, a geothermal energy supplier, borrowed $16 million cash to fund a geological survey. The loan was made by Nevada BancCorp under a noncommitted short-term line of credit arrangement. Quantum issued a nine-month, 12% promissory note. Interest was payable at maturity. Quantum’s fiscal period is the calendar year.Required:1. Prepare the journal entry for the issuance of the note by Quantum Technology.2. Prepare the appropriate adjusting entry for the note by Quantum on December 31, 2021.3. Prepare the journal entry for the payment of the note at maturity.
- On July 31, 2025, Oriole Company engaged Minsk Tooling Company to construct a special-purpose piece of factory machinery. Construction began immediately and was completed on November 1, 2025. To help finance construction, on July 31 Oriole issued a $326,400, 3-year, 12% note payable at Netherlands National Bank, on which interest is payable each July 31. $217,400 of the proceeds of the note was paid to Minsk on July 31. The remainder of the proceeds was temporarily invested in short-term marketable securities (trading securities) at 10% until November 1. On November 1, Oriole made a final $109,000 payment to Minsk. Other than the note to Netherlands, Oriole's only outstanding liability at December 31, 2025, is a $31,400, 8 %, 6-year note payable, dated January 1, 2022, on which interest is payable each December 31. (a) Calculate weighted average accumulated expenditures, avoidable interest, and total interest cost to be capitalized during 2025. Weighted-average accumulated expenditures…On November 1, 2021, Quantum Technology, a geothermal energy supplier, borrowed $4 million cash to fund a geological survey. The loan was made by Nevada BancCorp under a noncommitted short-term line of credit arrangement. Quantum issued a nine-month, 9% promissory note. Interest was payable at maturity. Quantum's fiscal period is the calendar year. Required: 1. Prepare the journal entry for the issuance of the note by Quantum Technology. 2. & 3. Prepare the appropriate adjusting entry for the note by Quantum on December 31, 2021 and journal entry for the payment of the note at maturity. (For all requirements, If no entry is required for a transaction/event, select "No journal entry required" In the first account fleld. Enter your answers in whole dollars.) View transaction list Journal entry worksheet 1 2 Record the issuance of the note by Quantum Technology. Date November 01, 2021 3 Note: Enter debits before credits. Record entry General Journal Clear entry Debit Credit View general…Zephyr Company is provided a grant by a foreign government for the purpose of acquiring land for a building site. The grant is a zero-interest loan for 5 years evidenced by a promissory note. The loan was granted on January 1, 2021 for 8,000,000. The market rate of interest is 6%. The present value of 1 for five periods at 6% is .7473. Required: Prepare journal entries for 2021 and 2022.
- On December 31, 2020, Faital Company acquired a computer from Plato Corporation by issuing a $600,000 zero-interest-bearing note, payable in full on December 31, 2024. Faital Company's credit rating permits it to borrow funds from its several lines of credit at 10%. The computer is expected to have a 5-year life and a $70,000 salvage value. Instructions (Round answers to the nearest cent.) a. Prepare the journal entry for the purchase on December 31, 2020. b. Prepare any necessary adjusting entries relative to depreciation (use straight-line) and amortization (use effective-interest method) on December 31, 2021. c. Prepare any necessary adjusting entries relative to depreciation and amortization on December 31, 2022.Date 12/31/25 12/31/26 12/31/27 12/31/28 12/31/29 Schedule of Note Discount Amortization Debit Interest Expense / Credit Discount on Notes Payable $ Carrying Value of NoteOn January 1, 2018, Laramie Inc. acquired land for $6.2 million. Laramie paid $1.2 million in cash and signed a 6% note requiring the company to pay the remaining $5 million plus interest on December 31, 2019. An interest rate of 6% properly reflects the time value of money for this type of loan agreement. For what amount should Laramie record the purchase of land?
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