Q/ The following events that occur during year 2020 on Arjiwan CO:1- On Mar 1, the company borrowed $360,000 from a local bank on a 10-years mortgagewith annual interest rate is 10%.2- 1/July company bought equipment costing $380,000 has useful life of 10 years and itsestimated salvage value is $20,000 using the straight line method,3- 1/Sep company paid rent 21000 cash for 7 months4- 31/12 company found that it not paid rent 7000 for OctRequired: record the necessary entries

Introduction:-The act of recording or keeping track of any financial or non-financial action is…

Answered: Q/ The following events that occur…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

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Chapter12: Current Liabilities

Section: Chapter Questions

Problem 12EA: Scrimiger Paints wants to upgrade its machinery and on September 20 takes out a loan from the bank...

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Future Values and Long-Term Investments Portman Corporation engaged in the following transactions during 2020: a. On January 1, 2020, Portman deposited $12,000 in a certificate of deposit paying 6% interest compounded semiannually (3% per 6-month period). The certificate will mature on December 31, 2023 b. On January 1, 2020, Portman established an account with Lee County Bank. Portman will make quarterly payments of $2,500 to Lee beginning on March 31, 2020, and ending on December 31, 2021. Lee guarantees an interest rate of 8% compounded quarterly (2% per 3-month period). Required: 1. Prepare the cash flow diagram for each of these two investments. 2. Calculate the amount to which each of these investments will accumulate at maturity. (Note: Round answers to two decimal places.)
Accrued Interest On May 1, the Garnett Corporation wanted to purchase a $200,000 piece of equipment, but Garnett was only able to furnish $75,000 of its own cash to purchase the equipment. Garnett borrowed the remainder of the $200,000 from the Peoples National Bank on a 3-year, 4% note. Required: If the company keeps its records on a calendar year, what adjusting entry should Garnett make on December 31?
Income, Cash Flow, and Future Losses On January L 2017, Cermack National Bank loaned 55,000,000 under a 2-year, zero coupon note to a real estate developer. The bank recognized interest revenue on this note of approximately $400,000 per year. Due to an economic downturn, the developer was unable to pay the $5,800,000 maturity amount on December 31, 2018. The bank convinced the developer to pay $800,000 on December 31, 2018, and agreed to extend $5,000,000 credit to the developer despite the gloomy economic outlook for the next several years. Thus, on December 31, 2018, the bank issued a new 2-year, zero coupon note to the developer to mature on December 31, 2020, for $6,000,000. The bank recognized interest revenue on this note of approximately $500,000 per year. The banks external auditor insisted that the riskiness of the new loan be recognized by increasing the allowance for uncollectible notes by $1,500,000 on December 31, 2018, and $2,000,000 on December 31, 2019. On December 31, 20201 the bank received $1,200,000 from the developer and learned that the developer was in bankruptcy and that no additional amounts would be recovered. Required: Prepare a schedule showing the effect of the notes on net income in each of the 4 years.
Income, Cash Flow, and Future Losses On January L 2017, Cermack National Bank loaned 55,000,000 under a 2-year, zero coupon note to a real estate developer. The bank recognized interest revenue on this note of approximately $400,000 per year. Due to an economic downturn, the developer was unable to pay the $5,800,000 maturity amount on December 31, 2018. The bank convinced the developer to pay $800,000 on December 31, 2018, and agreed to extend $5,000,000 credit to the developer despite the gloomy economic outlook for the next several years. Thus, on December 31, 2018, the bank issued a new 2-year, zero coupon note to the developer to mature on December 31, 2020, for $6,000,000. The bank recognized interest revenue on this note of approximately $500,000 per year. The banks external auditor insisted that the riskiness of the new loan be recognized by increasing the allowance for uncollectible notes by $1,500,000 on December 31, 2018, and $2,000,000 on December 31, 2019. On December 31, 20201 the bank received $1,200,000 from the developer and learned that the developer was in bankruptcy and that no additional amounts would be recovered. Required: 1. Prepare a schedule showing annual cash flows fur the two notes in each of the 4 years.
Income, Cash Flow, and Future Losses On January L 2017, Cermack National Bank loaned 55,000,000 under a 2-year, zero coupon note to a real estate developer. The bank recognized interest revenue on this note of approximately $400,000 per year. Due to an economic downturn, the developer was unable to pay the $5,800,000 maturity amount on December 31, 2018. The bank convinced the developer to pay $800,000 on December 31, 2018, and agreed to extend $5,000,000 credit to the developer despite the gloomy economic outlook for the next several years. Thus, on December 31, 2018, the bank issued a new 2-year, zero coupon note to the developer to mature on December 31, 2020, for $6,000,000. The bank recognized interest revenue on this note of approximately $500,000 per year. The banks external auditor insisted that the riskiness of the new loan be recognized by increasing the allowance for uncollectible notes by $1,500,000 on December 31, 2018, and $2,000,000 on December 31, 2019. On December 31, 20201 the bank received $1,200,000 from the developer and learned that the developer was in bankruptcy and that no additional amounts would be recovered. Required: Which figure, net income or net cash flow, does the better job of telling the banks stock-holders about the effect of these notes on the bank? Explain by reference to the schedules prepared in Requirements 1 and 2.
Reporting Liabilities Morton Electronics had the following obligations: a. A legally enforceable claim against the business to be paid in 3 months. b. A guarantee given by a seller to a purchaser to repair or replace defective goods during the first 6 months following a sale. c. An amount payable to Bank One in 10 years. d. An amount to be paid next year to Citibank on a long-term note payable. Required: CONCEPTIJAL CONNECTION Describe how each of these items should be reported in the balance sheet.
Scrimiger Paints wants to upgrade its machinery and on September 20 takes out a loan from the bank in the amount of $500,000. The terms of the loan are 2.9% annual interest rate and payable in 8 months. Interest is due in equal payments each month. Compute the interest expense due each month. Show the journal entry to recognize the interest payment on October 20, and the entry for payment of the short-term note and final interest payment on May 20. Round to the nearest cent if required.
Problem 2 On December 31, 2020, Shawn Company acquired a piece of equipment from Hailey Company by issuing a P1,200,000 note, payable in full on December 31, 2024. Shawn’s credit rating permits it to borrow funds from its several lines of credit at 10%. The equipment is expected to have a 5-year life and a P150,000 salvage value. The present value of 1 at 10% for 4 periods is 0.68301. 1. What is the equipment’s book value on December 31, 2022?2. What is the carrying value of the note at December 31, 2022?
4/30/2020 Purchased a Building for $625,000. Paid $200,000 in cash and signed a 10 year note payable for $425,000 with Chase Bank. The interest is payable annually at a rate of 4.25%. what would be the adjusting entry at 12/31 If the Building has a useful life of 20 years and a salvage value of $25,000.?
Problem 3 On June 30, 2020, Zendaya purchased a special machinery to conduct its oil drilling operations in Davao for P5,000,000, its useful life is 10 years. The Company is required by local government to clean the area after the drilling operations. The estimated clean-up costs was P1,500,000. The relevant discount rate was 8%. How much is the provision to be recognized in the statement of financial position as of December 31, 2020? (Round off answers to the nearest whole number)
19) Suppose the business purchased a new piece of equipment for a value of $36,000, on January 1, 2019. It is estimated that the equipment will last 6 years in the business, at which time it can be sold for $10,000. Using the Declining Balance Depreciation, what would the 2nd year's MONTHLY depreciation expense be? 1. $600 2. $5760 3. $480 4. $10,000
1. Suppose the business purchased a new car with a value of $30,000, on January 1, 2019. It is estimated that the car will last 6 years in the business, at which time it can be sold for $6000.a) Calculate the Annual Depreciation Expense for 1 years,b) Create the year 1 journal entry,c) Post how each of the 3 years will look on the balance sheet (refer to slide 25 to do this)

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