parasota purchased a new piece of equipment to be used in its new facility. The $416,000 piece of equipment was purchased with a $49,000 down payment and with cash received through the issuance of a $367,000, 6%, 5-year mortgage payable issued on Januar 2022. The terms provide for annual installment payments of $87,125 on December 31. (a) Prepare an installment payments schedule for the five payments of the notes payable. (Round answers to O decimal places, e.g. 15,250.) nual erest Cash Payment Interest Expense Reduction of Principal Principal Balam riod

parasota purchased a new piece of equipment to be used in its new facility. The $416,000 piece of equipment was purchased with a $49,000 down payment and with cash received through the issuance of a $367,000, 6%, 5-year mortgage payable issued on Januar 2022. The terms provide for annual installment payments of $87,125 on December 31. (a) Prepare an installment payments schedule for the five payments of the notes payable. (Round answers to O decimal places, e.g. 15,250.) nual erest Cash Payment Interest Expense Reduction of Principal Principal Balam riod

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter10: Liabilities: Current, Installment Notes, And Contingencies

Section: Chapter Questions

Problem 6E: Fixed asset purchases with note On June 30, Collins Management Company purchased land for 400,000...

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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, Boater Company issues a 20,000 non-interest-bearing, 5-year note for equipment. Neither the fair value of the note nor the equipment is determinable. Boaters incremental borrowing rate is 9%. The asset has a useful life of 7 years. Prepare the journal entry for Boater to record the issuance of the note on January 1.
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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Fixed asset purchases with note On June 30, Collins Management Company purchased land for 400,000 and a building for 560,000, paying 360,000 cash and issuing a 5% note for the balance, secured by a mortgage on the property. The terms of the note provide for 20 semiannual payments of 30,000 on the principal plus the interest accrued from the date of the preceding payment. Journalize the entry to record (A) the transaction on June 30, (B) the payment of the first installment on December 31, and (C) the payment of the second installment the following June 30.