poor a restructuring of a 9% P6,000,000 note payable to Second Due 'to adverse economic circumstances and negotiated management, Tagaytay Highlands Company had Bank due on January 1, 2020. There was no accrued on the note on January 1, 2020. interest The bank reduced the principal obligation from P6,000.00m to P5,000,000 and extended the maturity to three years December 31, 2022. However, the new interest rate is 13% payable annuall, every December 31. The present value of 1 at 9% for three periods is .77 and the present value of an ordinary annuity of 1 at 9% for three periods is 2.53. 1. What is the present value of the new note payable on January 1, 2020? a. 6,000,000 b. 5,000,000 c. 5,494,500 d. 3,850,000 2. What is the gain on modification of debt to be recognized for 2020? 500,000 b. a. 350,000 505,500 d. с. 3. What is the interest expense for 2020 as a result of the modification? a. 650,000 b. 450,000 c. 494,505 d. 540,000
poor a restructuring of a 9% P6,000,000 note payable to Second Due 'to adverse economic circumstances and negotiated management, Tagaytay Highlands Company had Bank due on January 1, 2020. There was no accrued on the note on January 1, 2020. interest The bank reduced the principal obligation from P6,000.00m to P5,000,000 and extended the maturity to three years December 31, 2022. However, the new interest rate is 13% payable annuall, every December 31. The present value of 1 at 9% for three periods is .77 and the present value of an ordinary annuity of 1 at 9% for three periods is 2.53. 1. What is the present value of the new note payable on January 1, 2020? a. 6,000,000 b. 5,000,000 c. 5,494,500 d. 3,850,000 2. What is the gain on modification of debt to be recognized for 2020? 500,000 b. a. 350,000 505,500 d. с. 3. What is the interest expense for 2020 as a result of the modification? a. 650,000 b. 450,000 c. 494,505 d. 540,000
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 30E
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Financial Reporting, Financial Statement Analysis…
Finance
ISBN:
9781285190907
Author:
James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Financial Reporting, Financial Statement Analysis…
Finance
ISBN:
9781285190907
Author:
James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:
Cengage Learning
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Fundamentals Of Financial Management, Concise Edi…
Finance
ISBN:
9781337902571
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning