In PALLID’s 20x1 financial statements, how much is presented as current liability in relation to the loan payable? PELLUCID CLEAR Co. has a 10%, P2,000,000 loan payable as of December 31, 20x1 which is maturing on July1, 20x2. Interest on the loan is due every July 1 and December 31 and all the interests that have accrued in20x1 were paid on these scheduled dates. On February 1, 20x2, PELLUCID Co. entered into a refinancingagreement with the bank to roll over the loan for another two years. PELLUCID Co. has the option to extendrepayment under the existing loan agreement, subject only to very minimal conditions which relate toadministrative tasks, such as filling-up of new loan forms and updating of borrower's information. PELLUCIDCo's financial statements were authorized for issue on March 15, 20x2. In PALLID's 20x1 financial statements,how much is presented as current liability in relation to the loan payable?

Liability means any amount which a business owes to others, creditors, suppliers etc. Liability can…

Answered: PELLUCID CLEAR Oo. has a 10%,…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 21P

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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.
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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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Homeland Plus specializes in home goods and accessories. In order for the company to expand its business, the company takes out a long-term loan in the amount of $650,000. Assume that any loans are created on January 1. The terms of the loan include a periodic payment plan, where interest payments are accumulated each year but are only computed against the outstanding principal balance during that current period. The annual interest rate is 8.5%. Each year on December 31, the company pays down the principal balance by $80,000. This payment is considered part of the outstanding principal balance when computing the interest accumulation that also occurs on December 31 of that year. A. Determine the outstanding principal balance on December 31 of the first year that is computed for interest. B. Compute the interest accrued on December 31 of the first year. C. Make a journal entry to record interest accumulated during the first year, but not paid as of December 31 of that first year.
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