On July 1, 2014, Mark Company acquired machinery worth P 2,500,000 from Julian Corporation. Terms of the contract calls for a down-payment of P 500,000 and signing a 2-year 10% note payable for the balance. Interest is payable quarterly. The existing loan agreement does not carry a provision to refinance. During September, Mark was experiencing financial difficulty and was unable to pay the periodic interest. What total amount of current liability should Mark Company report in its December 31, 2014 statement of financial position assuming Julian Company agreed after the balance sheet date but before the financial statements authorized to issue not to demand payment as a consequence of the breach? а. None b. Р 2,000,000 P 100,000 d. P 2, 100,000 с.

On July 1, 2014, Mark Company acquired machinery worth P 2,500,000 from Julian Corporation. Terms of the contract calls for a down-payment of P 500,000 and signing a 2-year 10% note payable for the balance. Interest is payable quarterly. The existing loan agreement does not carry a provision to refinance. During September, Mark was experiencing financial difficulty and was unable to pay the periodic interest. What total amount of current liability should Mark Company report in its December 31, 2014 statement of financial position assuming Julian Company agreed after the balance sheet date but before the financial statements authorized to issue not to demand payment as a consequence of the breach? а. None b. Р 2,000,000 P 100,000 d. P 2, 100,000 с.

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

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 28E: On January 1, 2019, Northfield Corporation becomes delinquent on a 100,000, 14% note to First...

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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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On January 1, 2019, Northfield Corporation becomes delinquent on a 100,000, 14% note to First National Bank, on which 16,651 of interest has accrued. On January 2, 2019, the bank agrees to restructure the note. It forgives the accrued interest, extends the repayment date to December 31, 2021, and reduces the interest rate to 10%. Required: Prepare a schedule for Northfield to compute the annual interest expense in regard to the preceding note for each year of the restructuring agreement.
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