Swifty Corporation borrowed $660000 from Liber Bank on January 1, 2019 in order to expand its mining capabilities. The five-year note required annual payments of $178200 and carried an annual interest rate of 8.50%. What is the amount of expense Swifty must recognize on its 2020 income statement? O $35580 O $45722 O $40969 O $56100

Swifty Corporation borrowed $660000 from Liber Bank on January 1, 2019 in order to expand its mining capabilities. The five-year note required annual payments of $178200 and carried an annual interest rate of 8.50%. What is the amount of expense Swifty must recognize on its 2020 income statement? O $35580 O $45722 O $40969 O $56100

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 1PA: On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10%...

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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.)
What is the carrying amount of the note as of December 31, 2022? On January 1, 2022. TGIG sold equipment with a historical cost of P10,000,000 and accumulated depreciation of P5,500,000 in exchange for a P6,000,000 non-interest-bearing note due in annual installments as follows: December 31. 2022 - 3, 000, 000 December 31, 2023 - 2, 000, 000 December 31 2024 - 1, 000, 000 There was no exchange price for the equipment. The prevailing rate of interest for a note of this type on January 1, 2022, was 10%. (Round off present value factors to four decimal places.
What is the carrying amount of the note as of December 31, 2022? On January 1, 2022. TGIG sold equipment with historical cost of P10,000,000 and accumulated depreciation of P5,500,000 in exchange for a P6,000,000 non-interest bearing note due in annual installments as follows: December 31, 2022 - P3,000,000 December 31, 2023 - P2,000,000 December 31, 2024 - P1,000,000 There was no exchange price for the equipment. The prevailing rate of interest for a note of this type on January 1, 2022 was 10%. (Round off present value factors to four decimal places.)
Windsor Company borrowed €1625000 from BankTwo on January 1, 2019, in order to expand its mining capabilities. The five-year note required annual payments of €422500 and carried an annual interest rate of 9.00%. What is the balance in the notes payable account at December 31, 2020, after the annual payment? €1047638 €1332500 €1348750 €1625000
. Carson Company borrowed P3,600,000 from a bank evidenced by a non-interest-bearing note due in five years. At the 12% imputed interest rate for this type of loan, the present value of the note is P2,550,000 on January 1, 2020. What interest expense should be reported in 2020? Group of answer choices P306,000 P350,000 P432,000 P0
Date 12/31/25 12/31/26 12/31/27 12/31/28 12/31/29 Schedule of Note Discount Amortization Debit Interest Expense / Credit Discount on Notes Payable $ Carrying Value of Note
Cheyenne Corp. borrowed $1080000 from National Bank on May 31, 2019. The 3-year, 7% note required annual payments of $411536 beginning May 31, 2020. The total amount of interest to be paid over the life of the loan is O $75600. O $154608. O $301688. O $226800.
Diamond Company borrowed P500,000 from Bank Two on January 1, 2007 in order to expand its mining capabilities. The five-year note required annual payments of P130,218 and carried an annual interest rate of 9.5%. What is the amount of expense Diamond must recognize on its 2008 income statement? Group of answer choices 35,129 31,037 39,642 47,500
RM Beach Bank loaned Dynamite Company P7,500,000 on January 1, 2018. The terms of the loan were payment in full on January 1, 2023 plus interest payment at 11%. The interest payment was made as scheduled on January 1, 2019. However, due to financial setbacks, Dynamite was unable to make its 2020 interest payment. RM Beach considers the loan impaired and projects the cash flows from the loan as of December 31, 2020. Assume that the bank accrued the interest at December 31, 2019, but did not continue to accrue interest due to the impairment of the loan. The projected cash flows are: December 31, 2021- P500,000; December 31, 2022- P1,000,000; December 31, 2023- P2,000,000; December 31, 2024- P4,000,000. Using two decimal places for the present value factor, how much is the loan impairment loss on December 31, 2020? A. P5,360,000 B. P2,965,000 C. P2,140,000 D. P2,240,000
Acruni Co. had the following loans in place at the beginning of 2019. 1 January 2019 GHC m 10% Bank loan repayable 2020 9.5% Bank loan repayable 2021 8.9% debenture repayable 2024 120 80 100 On 1 January 2019, Acruni Co began construction of a qualifying asset, a piece of machinery for a hydroelectric plant, using existing borrowings. Expenditure drawn down for the construction was GHC30 million on 1 January 2019, and GHC20 million on 1 October 2019. Surplus funds were invested temporarily at a rate of 2%. Required a) Calculate the borrowing costs that can be capitalized for the piece of machinery. b) Compute the cost of the machinery that will be reported in the statement of financial position as at December, 2019 ATES)
On January 2, 2024, the Midwestern Steam Gas Corporation purchased an industrial furnace. In payment, Midwestern signed a noninterest - bearing note requiring $50,000 to be paid on December 31, 2025 (two years later). If Midwestern had borrowed cash to buy the furnace, the bank would have required an interest rate of 10% . Required: Record the journal entry for Midwestern for 1/2/2024, 12/31/2024, and 12/31/2025.
B. MATATAG Bank loaned P5,000,000 to a borrower on January 1, 2019. The term of the loan require principal payments of P1,000,000 each year for 5 years plus interest at 8%. The first principal and interest payment is due on January 1, 2020. The borrower made the required payments during 2020 and 2021. However, during 2021 the borrower began to experience financial difficulties, requiring the bank to reassess the collectability of the loan. On December 31, 2021, the bank has determined that the remaining principal payment will be collected as originally scheduled but the collection of the interest is unlikely. The bank did not accrue the interest on December 31, 2021. Present value of 1 at 8% 0.926 For one period For two periods For three periods 0.857 0.794 1. What is the impairment loss for 2021? а. 423,000 b. 217,000 c. 222,000 d. 0 2. What is the interest income for 2022? a. 126,160 b. 142,640 c. 240,000 d. 0 3. What is the carrying amount of the loan receivable on December 31,…