On. Nov. 14, 20x1, Athena Co. sold its P30,000 loan receivable from Zevrek Co. to Devin Bank for P28,000. The sale agreement requires Athena Co. to repurchase the loan at a future date for P28,000 plus interest based on the current market rate on repurchase date.
Q: A P2,400,000, 6-month, 10% note dated May 1 is received from a customer by an entity and discounted…
A: As you have posted multiple independent questions, we are answering first three requirements. Please…
Q: Compute for the initial carrying amount of the loan. Compute for the effective interest rate on the…
A:
Q: On January 1, 20x1, RELISH TASTE Co. acquired a machine by issuing a 3%, P4,000,000 note due on…
A: Semi annual interest payment= P 4000000*3%*1/2= P 60000
Q: On January 31$t, 2021, X Co. transfers $400,000 in receivables to Cater Finance with recourse. Cater…
A: Amount Retained by Cater Finance: Factored Receivables $ 400,000 10% of Factored…
Q: P72,000. At the end of the period, FDN Trading’s notes payable had a balance of P190,000. How much…
A: Solution: Beginning balance of the notes payable = Ending balance of notes payable + Total payments…
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: 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: rns, and allowances. The transaction is to be recorded as a sale. Instructions: a) Prepare the…
A: Journal entry: Journal entry is the book of original entry where first transactions are recorded in…
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: APA, Inc. signed a note payable to its bank for P10,000. Accrued interest on the note on February…
A: Given data, Note payable =P10,000 Accrued interest =P250 Inventory at selling price=P8,000 unsecured…
Q: Quick Print Press borrowed $20,000 from the Provincial Bank on May 25 at 7.5% and secured the loan…
A: 25-May Loan Amount $ 20,000.00 Interest Rate 7.50% 10-Jul Partial…
Q: On January 1, 2020, CPA Co. sold land with carrying amount of P1,800,000 in exchange for a 10-month,…
A: Notes receivable are the asset of the firm where a borrower gives a written promise to lender to pay…
Q: On January 1, 20x1, SCRUPULOUS EXACT Co, acquired a piece of equipment by issuing a P12,000,000,…
A: The question is based on the concept of Financial accounting.
Q: KMC Inc. provided a loan to Jim Ltd on January 1st, 2016 and received in exchange a 4-year, $120,000…
A: The note receivable is the assets, for which the cash would be received in future period.
Q: What should be the balance of the Discount on Notes Payable account on the books of ABC Company at…
A: Note payable- A promissory note or written agreement is referred to as a note payable. The…
Q: Kingbird Corporation factors $ 276,900 of accounts receivable with Kathleen Battle Financing, Inc.…
A: RECOURSE FACTORING IS THE MOST COMMON AND MEANS THAT FACTOR CAN DEMAND MONEY BACK FROM THE COMPANY…
Q: On December 31, 2021, Chang Company sold a machihe in the ordinary course of business to Door…
A: Present value means the actual amount is adjusted with the interest rate so as to get the present…
Q: On November 1, 2021, Calexico Trading accepted a 90-day, 8% P2,000,000 note from ABC Co. Calexico…
A: Notes Payable / Receivable The purpose issuing the Notes receivable / Notes payable to collect the…
Q: On April 1, 2014, Somers Company assigns $200,000 of its accounts receivable to Third National Bank…
A: Working note: Computation of finance charges: Finance charges=Accounts receivable assigned×Rate of…
Q: On November 1, 2021, FDN Trading accepted a 90-day, 8% P10,000,000 note from ABC Co. FDN immediately…
A: Maturity value of the note = Face value + interest = P10,000,000 +P10,000,000 *8%*90/360 = P10200000
Q: On Dec. 31, 20x1, Tissue Co. determines that its loan receivable from Breakfast Co. with a carrying…
A: Loan is an amount which a lender gives to a borrower to fulfil the financial need of the borrower at…
Q: Greenyard Corp. factored P200,000 accounts receivable to Provider Financing Corp. on a without…
A: The proceeds received will be net of the service fee, interest and amount retained.
Q: On January 1, 200A, ABC rendered services to XYZ at a price of P450,000. ABC received P500,000…
A: ABC delivered services to XYZ at a cost of P450,000, as stated on January 1, 200A. XYZ issued ABC a…
Q: Bank CO approved a loan application of Client ME on January 1, 20A for P3,500,000. Client ME is…
A: Direct origination costs are initially added to the carrying amount of the loan and are subsequently…
Q: On January 1, 20x1, Next Co. obtains a P4,000,000 bank loan due on December 31, 20x4. Interest of…
A:
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: ABC Co. issued a 3-year non-interest bearing note in exchange of an equipment for P 1,000,000, which…
A: As per PFRS 9, Financial instruments Non interest bearing Note payable is to be recognised at…
Q: On July 31, 2021, Sampaguita Company borrowed from a bank via issuing a 13.5% note. Transaction…
A: The interest expense is the charge against the profit or net income of the business. It is shown in…
Q: On January 1, 20x1, an entity obtains an 11%, P5,000,000 bank loan. The bank charges the entity an…
A: Borrowings are the liability of the company which is used to finance the requirement of the funds.…
Q: 2. On July 1, 2019, XYZ Co. borrowed P2,000,000 and İssued a one-year promissory note. The lender…
A: The notes payable is an agreement where the borrower promises to pay interest and principal at…
Q: How much is the interest expense for 2020?
A: Interest expenses are those expenses which the company has to pay on amount which is outstanding and…
Q: Anama Company is a dealer of equipment. On January 1, 2021, the entity sold equipment in exchange…
A: As per amortized cost method, the financial instrument is recognized at present value and increases…
Q: On April 1,2020, Aljean Company discounted with recourse a 9-month, 10% note dated January 1, 2020…
A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…
Q: valuatio agreement requires Athena Co. to repurchase the loan a of from Zevrek Co. to Devin Bank for…
A: As posted multiple independent questions we are answering only first question kindly repost the…
Q: The Premiere Company obtained a short-term bank loan for P1,000,000 at an annual interest rate 12%.…
A: "Since you have posted a multi-part question therefore as per the guidelines we will be solving the…
Q: On October 31, 2021 T Company engaged in the following transactions: [1] Obtained a P500,000,…
A: S. No Particulars Amount (P) 1 Loan from BDO Total Loan obtained from BDO…
Q: Bank CO approved a loan application of Client ME on January 1, 20A for P3,500,000. Client ME is…
A: A contra account is used in a general ledger to reduce the value of a connected account when the two…
Q: On February 1, 2019, Henson Company factored receivables with a carrying amount of $300,000 to Agee…
A: When a firm factors its receivable to another firm, the former firm transfers right to collect…
Q: . On Dec. 31, 20x1, Tissue Co. determines that its loan receivablefrom Breakfast Co. with a carrying…
A: The present value of future cash flow is calculated to know the worth of the future value of money…
Q: On July 31, 2021, Sampaguita Company borrowed from a bank via issuing a 13.5% note. Transaction…
A: The interest expense is the charge against the profit or net income of the business. It is shown in…
Q: On November 1, 2021, FDN Trading accepted a 90-day, 8% P9,000,000 note from ABC Co. FDN immediately…
A: Maturity value of the note = Face value of the not + Interest on the note = 9000000 +…
Q: On December 31, 2023, JFG Company, a financing institution, lent P4,000,000 to MFG Company due 3…
A: Impairment Loss-:An Impairment Loss is a prominent reduction in the carrying amount of an investment…
Q: On January 1, 20x1, PRISM Co. acquired machinery by issuing a 3-year, P1,200,000 noninterest-bearing…
A: The present value of a future cash flow is the amount of all future cash flows. The present value of…
Q: On July 31, 2021, ABC Company borrowed from a bank via issuing a 13.2% note. Transaction costs of…
A: No expense in 2020 because no point related to the 2020 year. Where as in 2021 the interest expense…
Q: On April 1, 2020, ABC Company discounted with recourse a 9-month, 10% note dated January 1, 2020…
A: The calculation of note interest and maturity value of note has been made as follows: Note…
Q: The following information are provided by Narra Company on its fiscal year ending October 31, 2020.…
A: Current liabilities refer to the amount of liability for which payment is due within a year or the…
Q: On January 1, 2017, Oldham Company sold goods to Windall Company in exchange for a 3-year,…
A: Journal entry:Journal entry is a set of economic events which can be measured in monetary terms.…
Q: Nicks Incorporated sells $2,450,000 of its accounts receivable to Fairfield Factors (FF). FF charges…
A: In case of factoring of receivables, the following things may happen: A commission will be charged…
Q: Eastwest Bank extended a 3-year $5,000,000 loan to Nick Company on January 1, 2020. The interest…
A: As per amortized method, the transaction is recognized at transaction price less transaction cost…
Q: On December 31, 2021, Chang Company sold a machine in the ordinary course of business to Door…
A: Answer to Question: The carrying amount of the note receivable on December 31, 2022 is d)57,50,000…
On. Nov. 14, 20x1, Athena Co. sold its P30,000 loan receivable from Zevrek Co. to Devin Bank for P28,000. The sale agreement requires Athena Co. to repurchase the loan at a future date for P28,000 plus interest based on the current market rate on repurchase date.
Requirement: Provide the
Step by step
Solved in 2 steps with 1 images
- 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. 36,000On June 1, Phillips Corporation sold, with recourse, a note receivable from a customer to a bank. The note has a face value of 15,000 and a maturity value (principal plus interest) of 15,400. The discount is calculated to be 385, and the accrued interest income is 100. The recourse liability is estimated to be 1,000. Prepare the journal entry of Phillips to record the sale of the note receivable.On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan.
- Spath Company borrows 75,000 by issuing a 4-year, noninterest-bearing note to a customer on January 1, 2019. In addition, Spath agrees to sell inventory to the customer at reduced prices over a 5-year period. Spaths incremental borrowing rate is 12%. The customer agrees to purchase an equal amount of inventory each year over the 5-year period so that a straight-line method of revenue recognition is appropriate. Required: Prepare the journal entries on Spaths books for 2019 and 2020. (Round answers to 2 decimal places.)On July 1, 2019, Aldrich Company purchased as an available-for-sale security 200,000 face value, 9% U.S. Treasury notes for 194,000. The notes mature July 1, 2020, and pay interest semiannually on January 1 and July 1. The notes were sold on December 1, 2019, for 199,000. Aldrich normally uses straight-line amortization on all of its notes. In its income statement for the year ended December 31, 2019, what amount should Aldrich report as a gain on the sale of the available-for-sale security? a. 2,500 b. 3,500 c. 5,000 d. 6,000Comprehensive Notes Receivable On January 1, 2019, Seaver Company sold land with a book value of 23,000 to Bench Company. Bench paid 15,000 down and signed a 15,000 non-interest-bearing note, payable in two 7,500 annual installments on December 31, 2019, and 2020. Neither the fair value of the land nor of the note is determinable. Benchs incremental borrowing rate is 12%. Later in the year, on July 1, 2019, Seaver sold a building to Hane Company, accepting a 2-year, 100,000 non-interest-bearing note due July 1, 2021. The fair value of the building was 82,644.00 on the date of the sale. The building had been purchased at a cost of 90,000 on January 1, 2014, and had a book value of 67,500 on December 31, 2018. It was being depreciated on a straight-line basis (no residual value) over a 20-year life. Required: 1. Prepare all the journal entries on Seavers books for January 1, 2019, through December 31, 2020, in regard to the Bench note. 2. Prepare all the journal entries on Seavers books for July 1, 2019, through July 1, 2021, in regard to the Hane note. 3. Prepare the notes receivable portion of Seavers balance sheet on December 31, 2019 and 2020.
- On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan. Refer to RE6-10. On December 31, Jordan Inc. received 50,000 on assigned accounts. Prepare Jordans journal entries to record the cash receipt and the payment to McLaughlin.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.Element Surfboards issued a $210,800 note on January 1, 2018 to a customer, Leona Marland, in exchange for merchandise. Terms of the note are 9-month maturity date on October 1, 2018 at a 10.2% annual interest rate. Leona Marland does not pay on her account and dishonors the note. On December 2, 2018, Element Surfboards decides to sell the dishonored note to a collection agency for 30% of its value. Record the journal entries for Element Surfboards for the following transactions. A. Initial sale on January 1, 2018 B. Dishonored note entry on October 1, 2018 C. Receivable sale on December 2, 2018
- Laminate Express extended credit to customer Amal Sunderland in the amount of $244,650 for his January 4 purchase of flooring. Terms of the sale are 2/30, n/120. The cost of the purchase to Laminate Express is $88,440. On April 5, Laminate Express determined that Amal Sunderlands account was uncollectible and wrote off the debt. On June 22, Amal Sunderland unexpectedly paid 30% of the total amount due in cash on his account. Record each Laminate Express transaction with Amal Sunderland. In order to demonstrate the write-off and then subsequent collection of an account receivable, assume in this example that Laminate Express rarely extends credit directly, so this transaction is permitted to use the direct write-off method. Remember, though, that in most cases the direct write-off method is not allowed.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.)Mystic Magic issued a $120,250 note on January 1, 2018 to a customer, Amy Arnold, in exchange for merchandise. Terms of the note are 9-month maturity date on October 1, 2018 at a 9.6% annual interest rate. Amy Arnold does not pay on her account and dishonors the note. On November 10, 2018, Mystic Magic decides to sell the dishonored note to a collection agency for 25% of its value. Record the journal entries for Mystic Magic for the following transactions. A. Initial sale on January 1, 2018 B. Dishonored note entry on October 1, 2018 C. Receivable sale on November 10, 2018