Total gains on the settlement of debt to be recognized in profit or loss:
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A: NOTE : As per BARTLEBY guidelines, when multiple questions are given then first question is to be…
Q: On December 31, 2010, EEEE Company was indebted to AFE Company on a P2,000,000, 10% note. Only…
A: Note: Hi! Thank you for the question, As per the honor code, we are allowed to answer three…
Q: On December 31, 2021, LoL Co. was indebted to Garena Street Company on a P2M, 10% note. Only…
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Q: On January 1, 2019, A Company purchased equipment. There was no established market price for the…
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Q: In the google form, provide the interest income to be recorded on that same day.
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Q: On January 1, 2020, Aguilar Corporation purchased bonds with a face value of P4,000,000 for…
A: Step 1 Journal is the Part of Book Keeping.
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Q: On May 1, 2020, GAL Co. purchased a short-term P2,000,000 face value, 9% debt instruments for…
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Q: On January 1, 2019, Sobiono company sold land to Gliezel company. There were no established market…
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Q: On January 1,2021, ABC Corporation purchased a land for P 15,000,000. In exchange of the land, ABC…
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Q: On January 1,2021, XYZ Corporation purchased a land for P 15,000,000. In exchange of the land, ABC…
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Q: ABC Company has a P15,000,000, two-year note payable to DEF that matures October 31, 2021. ABC's…
A: Solution Concept The current portion of the long term debt is classified as the current liabilities…
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Q: On December 31, 2021, ABC Co. was indebted to XYZ Street Company on a P2M, 10% note. Only interest…
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Q: Larkspur Co. owes $202,500 to Cullumber Inc. The debt is a 10-year, 11% note. Because Larkspur Co.…
A: Gain on Land Disposition = fair value - book value = $146,600 - $92,800 = $53,800
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A:
Q: On May 1, 2019, Orlan Company purchased a short-term $2,000,000 face value, 9% debt instruments for…
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A: Given, Purchases = P 1,860,000 Face Value = P 2,000,000 Fair value = 98%
Q: At January 1, 2021, Transit Developments owed First City Bank Group $720,000, under an 9% note with…
A: Prepare the journal entries to record the restructuring of the debt by Transit Developments:…
Q: At January 1, 2016, Transit Developments owed First City Bank Group $600,000, under an 11% note with…
A: Prepare the journal entries to record the restructuring of the debt by Transit Developments
Q: On January 1, 2021, J Company sold equipment at a cost of P700,000 and accumulated depreciation of…
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Q: On December 31, 2021, LoL Co. was indebted to Garena Street Company on a P2M, 10% note. Only…
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A: Gain on extinguishment of debt = note payable carrying amount - fair value of land
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Q: On December 31, 2021, ABC Co. was indebted to XYZ Street Company on a P2M, 10% note. Only interest…
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Q: On May 1, 2020, GAL Co. purchased a short-term P2,000,000 face value, 9% debt instruments for…
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Q: On Jan. 1, 2021, Yumi Co. settled a P 1,000,000 loan payable with an unamortized discount of P…
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Q: On January 1, 2022, Jantzen Company sold land to Dansko Company. There was no established market…
A: Carrying Amount of Notes = Beginning Balance + Interest Accrued - Principal repaid
Q: On July 1, 2018, ABC Company borrowed P1,000,000 on a 10% five-year note payable. On December 31,…
A:
Q: Due to extreme financial difficulties, Aries Company negotiated a restructuring of a 10%,…
A:
Q: Gottlieb Co. owes $199,800 to Ceballos Inc. The debt is a 10-year, 11% note. Because Gottlieb Co. is…
A: a.
Q: On December 31, 2021, Empoy Company has overdue notes payable of P5,000,000 with accrued interest of…
A:
Q: On December 31, 2021, Empoy Company has overdue notes payable of P5,000,000 with accrued interest of…
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Q: BROWN Company is indebted to WHITE Company under a ₱4,000,000, 12%, three-year note dated December…
A: Here Brown company indebted to White company for the Notes payable of P 4000000 with the interest…
Q: On January 1, 2020, ABC Company sold property to the DEF Company. There was no established exchange…
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Q: If on Nov. 30, 2021, ABC sold the investment, what is the interest income for that year?
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Q: On May 1, 2020, Girl Co. purchased a short-term P2,000,000 face value, 9% debt instruments for…
A: Recognized income=Selling price-Purchase price
Q: , 2018, ABC Company borrowed P1,000,000 on a 10% five-year note payable. On December 31, 2018, the…
A: Basic Accounting Concepts, Note Payable
• Settle one half of the note by transferring land with a recorded value of P800,000, and a fair value of P900,000.
• Settle one fourth of the note by transferring 200,000 shares of P1 par ordinary shares with a fair value of P1.80 per share.
• Modify the terms of the remaining one fourth of the note by reducing the interest to 5%, extend the due date three years from the date of restructuring and reducing the principal to P300,000.
Total gains on the settlement of debt to be recognized in profit or loss:
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- On July 1, 2019, Aldrich Company purchased as an available-for-sale security 200,000 face value, 9% U.S. Treasury notes for 194,000. The notes mature July 1, 2020, and pay interest semiannually on January 1 and July 1. The notes were sold on December 1, 2019, for 199,000. Aldrich normally uses straight-line amortization on all of its notes. In its income statement for the year ended December 31, 2019, what amount should Aldrich report as a gain on the sale of the available-for-sale security? a. 2,500 b. 3,500 c. 5,000 d. 6,000On January 1, 2019, Northfield Corporation becomes delinquent on a 100,000, 14% note to First National Bank, on which 16,651 of interest has accrued. On January 2, 2019, the bank agrees to restructure the note. It forgives the accrued interest, extends the repayment date to December 31, 2021, and reduces the interest rate to 10%. Required: Prepare a schedule for Northfield to compute the annual interest expense in regard to the preceding note for each year of the restructuring agreement.On January 1, Kilgore Inc. accepts a 20,000 non-interest-bearing, 5-year note from Dieland Company for equipment. Neither the fair value of the note nor the equipment is determinable. Kilgore had originally purchased the equipment for 18,000, and the equipment has a book value of 14,000 on January 1. Kilgore knows Dielands incremental borrowing rate of 9%. Prepare the journal entry for Kilgore to record the sale of the equipment on January 1.
- On January 1, 2019, Brewster Company issued 2,000 of its 5-year, 1,000 face value, 11% bonds dated January 1 at an effective annual interest rate (yield) of 9%. Brewster uses the effective interest method of amortization. On December 31, 2023, Brewster extinguished the 2,000 bonds early through acquisition in the open market for 1,980,000. On July 1, 2022, Brewster issued 5,000 of its 6-year, 1,000 face value, 10% convertible bonds dated July 1 at an effective annual interest rate (yield) of 12%. The bonds are convertible at the option of the investor into Brewsters common stock at a ratio of 10 shares of common stock for each bond. Brewster uses the effective interest method of amortization. On July 1, 2023, an investor in Brewsters convertible bonds tendered 1,500 bonds for conversion into 15,000 shares of Brewsters common stock, which had a market value of 105 per share at the date of the conversion. Required: 1. Using the information about Brewster, answer the following questions: a. Were the 11% bonds issued at par, at a discount, or at a premium? Why? b. Is the amount of interest expense for the 11% bonds using the effective interest method of amortization higher in the first or second year of the life of the bond issue? Why? 2. Using the information about Brewster, explain the following: a. How is a gain or loss on early extinguishment of debt determined? Does the early extinguishment of the 11% bonds result in a gain or loss? Why? b. How does Brewster report the early extinguishment of the 11% bonds on the 2023 income statement? 3. Based on the information provided about Brewster, answer the following questions: a. Does recording the conversion of the 10% convertible bonds into common stock under the book value method affect net income? What is the rationale for the book value method? b. Does recording the conversion of the 10% convertible bonds into common stock under the market value method affect net income? What is the rationale for the market value method?Spath Company borrows 75,000 by issuing a 4-year, noninterest-bearing note to a customer on January 1, 2019. In addition, Spath agrees to sell inventory to the customer at reduced prices over a 5-year period. Spaths incremental borrowing rate is 12%. The customer agrees to purchase an equal amount of inventory each year over the 5-year period so that a straight-line method of revenue recognition is appropriate. Required: Prepare the journal entries on Spaths books for 2019 and 2020. (Round answers to 2 decimal places.)On December 31, 2021, ABC Co. was indebted to XYZ Street Company on a P2M, 10% note. Only interest had been paid to date. Due to its financial difficulties ABC has negotiated a restructuring of its notes payable. The parties agree that ABC would settle the debt on the following terms:• Settle one half of the note by transferring land with a recorded value of P800,000, and a fair value of P900,000.• Settle one fourth of the note by transferring 200,000 shares of P1 par ordinary shares with a fair value of P1.80 per share.• Modify the terms of the remaining one fourth of the note by reducing the interest to 5%, extend the due date three years from the date of restructuring and reducing the principal to P300,000. Total gains on the settlement of debt to be recognized in profit or loss: A. P437,306 B. P0 C. P577,306 D. P337,306 E. P340,000
- On December 31, 2021, LoL Co. was indebted to Garena Street Company on a P2M, 10% note. Only interest had been paid to date. Due to its financial difficulties LoL has negotiated a restructuring of its notes payable. The parties agree that LoL would settle the debt on the following terms: • Settle one half of the note by transferring land with a recorded value of P800,000, and a fair value of P900,000. • Settle one fourth of the note by transferring 200,000 shares of P1 par ordinary shares with a fair value of P1.80 per share. • Modify the terms of the remaining one fourth of the note by reducing the interest to 5%, extend the due date three years from the date of restructuring and reducing the principal to P300,000. Total gains on the settlement of debt to be recognized in profit or loss is: A.P337,306B.P340,000C.P437,306D.P577,306On December 31, 2021, LoL Co. was indebted to Garena Street Company on a P2M, 10% note. Only interest had been paid to date. Due to its financial difficulties has negotiated a restructuring of its notes payable. The parties agree that LoL would settle the debt on the following terms: • Settle one half of the note by transferring land with a recorded value of P800,000, and a fair value of P900,000. • Settle one fourth of the note by transferring 200,000 shares of P1 par ordinary shares with a fair value of P1.80 per share. Modify the terms of the remaining one fourth of the note by reducing the interest to 5%, extend the due date three years from the date of restructuring and reducing the principal to P300,000. Total gains on the settlement of debt to be recognized in profit or loss is: A.P437,306B.P577,306C.P337,306D.POE.P340,000On January 1, 2021, ABC Company sold property to the DEF Company. There was no established exchange price for the property, and DEF gave ABC a P2,000,000 non-interest bearing note payable in 5 equal annual installments of P400,000, with the first payment due December 31, 2021. The prevailing rate of interest for a note of this type is 9%.What amount from the carrying value of the notes shall be presented as part of the non-current liabilities as of December 31,2023? P 703,644.47 P 336,672.00 P 366,972.48 P 308,873.39
- On December 31, 2010, EEEE Company was indebted to AFE Company on a P2,000,000, 10% note. Only interest had been paid to date. Due to its financial difficulties, EEEE Company has negotiated a restructuring of its note payable. The parties agreed that EEEE Company would settle the debt on the following terms: Settle one-half of the note by transferring land with a recorded value of P800,000 and a fair value of P900,000. Settle one-fourth of the note by transferring 200,000 shares of P1 par ordinary shares with a fair market value of P15 per share. Modify the terms of the remaining one-fourth of the note by reducing the interest rate to 5%, extend the due date three years from the date of restructuring and reducing the principal to P300,000. 1. What is the carrying amount of the note payable as of December 31, 2011? Choices: 142,494 300,000 273,963 262,694 2. What is the total gain on extinguishment of debt? Choices: 550,006 337,306 -0- 437,306 3. What is the gain on extinguishment of…On January 1, 2021, ABC Company sold property to the DEF Company. There was no established exchange price for the property, and DEF gave ABC a P2,000,000 non-interest bearing note payable in 5 equal annual installments of P400,000, with the first payment due December 31, 2021. The prevailing rate of interest for a note of this type is 9%.What should be the balance of the Discount on Notes Payable account on the books of ABC Company at December 31, 2022 after adjusting entries are made assuming that the effective interest method is used?On January 1, 2020, ABC Company sold property to the DEF Company. There was no established exchange price for the property, and DEF gave ABC a P2,000,000 non-interest bearing note payable in 5 equal annual installments of P400,000, with the first payment due December 31, 2020. The prevailing rate of interest for a note of this type is 9%.What should be the balance of the Discount on Notes Payable account on the books of DEF at December 31, 2021 after adjusting entries are made assuming that the effective interest method is used? A. 0 B. 444,139.49 C.187,482.13 D. 304,112.05