On July 1, 2000, the New York Mets reached an agreement with Bobby Bonilla to defer the remaining $5.6 million on Bonilla's contract (with interest), whi would have otherwise been due to be paid immediately. The deferment agreement called for the salary to be paid in 25 equal installments, with the first payment being made on July 1, 2011. The agreement stipulated that the relevant interest rate applied to this deal would be 7.5%. Beginning on July 1, 2011 (and every July 1 for the following 24 years), how much was Bobby Bonilla paid by the Mets? In other words, what is the value of each annual salary installment? C.... The annual salary installment paid to Bobby Bonilla each year, beginning on July 1, 2011, is: $4 (round your answer to the nearest dollar)

On July 1, 2000, the New York Mets reached an agreement with Bobby Bonilla to defer the remaining $5.6 million on Bonilla's contract (with interest), whi would have otherwise been due to be paid immediately. The deferment agreement called for the salary to be paid in 25 equal installments, with the first payment being made on July 1, 2011. The agreement stipulated that the relevant interest rate applied to this deal would be 7.5%. Beginning on July 1, 2011 (and every July 1 for the following 24 years), how much was Bobby Bonilla paid by the Mets? In other words, what is the value of each annual salary installment? C.... The annual salary installment paid to Bobby Bonilla each year, beginning on July 1, 2011, is: $4 (round your answer to the nearest dollar)

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...

See similar textbooks

Similar questions

Last month, Major League Baseball star Rafael Devers signed a 10-year contract extension with the Boston Red Sox. Instead of taking the full amount of his salary over the course of the 10 years covered by his contract, he chose to defer receipt on almost a quarter of the total value of the contract. He will receive that deferred portion of the contract in biannual installments until the year 2043. Why make a deal like this? What factors should be taken into consideration? What are the pros and cons?
On January 1, 2011, Michael August signed an agreement to operate as a franchisee of Ivan Steven for an initial franchise fee of P2,000,000. The amount of P800,000 was paid when the agreement was signed, and thebalance is covered by a non-interest bearing note payable in five annual payments of P240,000 each, beginning January 1, 2012. The agreement provides that the downpayment is not refundable and that no future services are required of the franchisor. The franchisee’s credit rating indicates that he can borrow money at 11% for a loan of this type. The present value of an ordinary annuity of 1 at 11% for five periods is 3.69590.Requirements: Determine the amount that Ivan Steven should record as revenue from franchise fee on January 1,2011. On December 1, 20x1, CANOROUS Co. granted a 5-year franchise right to MELODIOUS, Inc. for an initial franchise fee of ₱400,000 and a 10% sales-based royalty. The initial franchise fee is non-refundable and due upon signing of the contract. At…
Jones Corporation borrowed P80,000 from Brown Corporation on Jan 1,1993 and P12,000 on Jan 1, 1995. Jones Corporation made a partial payment of P10,000 on Jan 1, 1996. It was agreed that the balance of the loan will be amortized by two payments, one on Jan. 1, 1997 and the other on Jan. 1, 1998, the second being 60% larger than the first. If the interest rate is 12%, what is the amount of each payment?
This Company defaulted in two annual interest payments on its P4,000,000 loan. Because of the default, the lender agrees on December 31, 2021 to restructure the loan as follows: The lender waives the repayment of the unpaid (simple) interest and any future interests. The loan, which is originally maturing in lump sum on December 31, 2021, will be due in four equal annual payments of P1,000,000, to start immediately. The original effective interest rate is 10%, equal to the stated rate on the original loan contract. The current market rate on December 31, 2021 is 12%. What amount of interest expense should This Company recognize in 2022?
On January 1, 2011, Michael August signed an agreement to operate as a franchisee of Ivan Steven for an initial franchise fee of P2,000,000. The amount of P800,000 was paid when the agreement was signed, and the balance is covered by a non-interest-bearing note payable in five annual payments of P240,000 each, beginning January 1, 2012. The agreement provides that the down payment is not refundable and that no future services are required of the franchisor. The franchisee’s credit rating indicates that he can borrow money at 11% for a loan of this type. The present value of an ordinary annuity of 1 at 11% for five periods is 3.69590. Requirements: Determine the amount that Ivan Steven should record as revenue from franchise fee on January 1,2011.
On January 1, 2011, Michael August signed an agreement to operate as a franchisee of Ivan Steven for an initial franchise fee of P2,000,000. The amount of P800,000 was paid when the agreement was signed, and the balance is covered by a non-interest bearing note payable in five annual payments of P240,000 each, beginning January 1, 2012. The agreement provides that the down payment is not refundable and that no future services are required of the franchisor. The franchisee’s credit rating indicates that he can borrow money at 11% for a loan of this type. The present value of an ordinary annuity of 1 at 11% for five periods is 3.69590.Requirements: Determine the amount that Ivan Steven should record as revenue from franchise fee on January 1, 2011.
On July 01, 2021, Emerald Corporation sold a set of washing machine and a dryer for a total contract price of P200,000. The stand-alone selling prices of the washing machine and the dryer if sold separately are: 150,000 and 70,000, respectively. A 20% down payment was made and the balance is payable in six (6) equal installment payments of P28,564, inclusive of 2% interest, payable quarterly starting September 30 and December 31, 2021. How much is the total amount of interest earned in 2021?
Novak Inc. has decided to purchase equipment from Central Michigan Industries on January 2, 2020, to expand its production capacity to meet customers’ demand for its product. Novak issues a(n) $560,000, 5-year, zero-interest-bearing note to Central Michigan for the new equipment when the prevailing market rate of interest for obligations of this nature is 12%. The company will pay off the note in five $112,000 installments due at the end of each year over the life of the note.
On July 1, 2021, Emerald Corporation sold a set of washing machine and a dryer for a total contract price of P200,000. The stand alone selling prices of the washing machine and the dryer if sold separately are: 150,000 and 70,000, respectively. A 20% down payment was made and the balance is payable in six (6) equal installment payments of P28,564, inclusive of 2% interest, payable quarterly starting September 30 and December 31, 2021. How much is the revenue to be recognized on this contract on July 01, 2021?
In 2019, Ulna Company borrowed P10,000,000 from Plenty Lending Company to finance the construction of its facilities and for its operations with a stated rate of 10%. On the due date on December 31, 2022, Ulna owed interest for 2022, and the P10,000,000 principal. Ulna was in financial difficulty and was unable to make any payments. Ulna and Plenty agreed to amend the term of the note. The total interest due on December 31, 2022 is forgone. The principal was reduced to P9,000,000 and the maturity extended to December 31, 2026. However because of this concession the interest rate was increased to 12%. Relevant present value factors related to this note are as follows: the present value of 1 for 4 periods at 10% is .68, while the present value for an ordinary annuity at 10% for 4 periods is 3.17. As a result of the debt restructure, what amount should Ulna Company report as pretax gain in its 2022 income statement? a. 1,456,400 c. 956,400 b. 1,001,400 d. 0
On January 1, 2025, Nancy White signed an agreement, covering 5 years, to operate as a franchisee of Blossom Inc. for an initial franchise fee of $41,000. The amount of $12,000 was paid when the agreement was signed, and the balance is payable in five annual payments of $5,800 each, beginning January 1, 2026. The agreement provides that the down payment is nonrefundable and that no future services are required of the franchisor once the franchise commences operations on April 1, 2025. Nancy White's credit rating indicates that she can borrow money at 9% for a loan of this type. Click here to view the factor table. (a) Your answer is partially correct. -- 4 Prepare journal entries for Blossom for 2025-related revenue for this franchise arrangement. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
On December 31, 2019, Speedo’s Limited bought a yacht for $55,000, but made a down payment of $10,000. Speedo’s agreed to pay the balance in 10 equal end-of-year instalments and 10% interest on the declining balance. Calculate the annual payments.