True or false 1 .The note payable account will be credited at it's present value upon acquisition of a property if the note issued was non-interest bearing. 2. When an non-interest bearing note is issued to acquire an asset, the asset is debited at an amount equal to the down payment if there is any plus the face amount of the note.
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True or false
1 .The note payable account will be credited at it's present value upon acquisition of a property if the note issued was non-interest bearing.
2. When an non-interest bearing note is issued to acquire an asset, the asset is debited at an amount equal to the down payment if there is any plus the face amount of the note.
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- If the cash amount paid to satisfy the “Asset Retirement Obligation” (ARO) account balance is greater than the ARO balance, which of the following is true? A gain should be recorded A loss should be recorded Neither a gain nor a loss should be recordedE. What should have been the ENTRY to record the receipt of note from Company A on May 1, 2020? F. What should be the carrying value of the note received from Company A on May 1, 2020 G. How much is the gain or loss on sale of the land, if any?Which of the following is not true in regard to selling fixed assets? a.If the selling price is more than the book value, a gain is recorded. b.The cash receipt is recorded. c.The journal entry is similar to discarding fixed assets. d.Accumulated Depreciation will be credited.
- Explain why the value of the leased asset is not recorded at $5,176 ($1,294 x 4). The leased asset should be reported at the of the payments, which is $, and not at $ Identify and analyze the transaction by using the following steps:1. Determine activity – operating, investing or financing.2. Determine accounts affected and the amount of increases/decreases.3. Determine the financial statements affected – balance sheet, income statement.The accounting equation must balance for each transaction.Determine amortization using the effective interest method (see Exhibit 10-7 below for an example). Date Column 1LeasePayment Column 2InterestExpense Column 3Reduction ofObligation Column 4LeaseObligation 8% Col. 1 - Col. 2 1/1/2017 - - - $15,972 12/31/2017 $4,000 $1,278 $2,722 13,250 12/31/2018 4,000 1,060 2,940 10,310 12/31/2019 4,000 825 3,175 7,135 12/31/2020 4,000 571 3,429 3,706 12/31/2021 4,000 294 3,706 0 Column 1 is the total amount of the payment. To…When an asset is acquired and a note payable is assumed, explain how acquisition cost of the asset is determined when the interest rate for the note is less than the current market rate for similar notes.1. What is the amount of net free assets? 2. What is the estimated loss n asset realization? 3. What is the estimated recovery for the partially secured creditors? 4. What is the estimated recovery percentage for the notes payable?
- 1. IAS 36 applies to which of the following assets? (a) Inventories. (b) Financial assets. (c) Assets held for sale. (d) Property, plant, and equipment. 2. Value-in-use is (a) The market value. (b) The discounted present value of future cash flows arising from use of the asset and from its disposal. (c) The higher of an asset’s fair value less cost to sell and its market value. (d) The amount at which the asset is recognized in the balance sheet. 3. If the fair value less costs to sell cannot be determined (a) The asset is not impaired. (b) The recoverable amount is the value-in-use. (c) The net realizable value is used. (d) The carrying value of the asset remains the same. 4. If assets are to be disposed of (a) The recoverable amount is the fair value less costs to sell. (b) The recoverable amount is the value-in-use. (c) The asset is not impaired. (d) The recoverable amount is the carrying value. 5. Estimates of future cash flows normally would cover projections over a maximum…Q1 Which of the following statement (s) is (are) true? (i) When no future economic benefits are no longer expected to flow from an intangible asset, such asset should be derecognized the financial statements of an organization. (ii) When an intangible asset is derecognized, the carrying amount should be written off as a loss in the profit or loss statement at the date of retirement of the asset. (iii) When an intangible asset is sold, the difference between the carrying amount and consideration received is recognized in the profit or loss statement at the date of the sale. (iv) Consideration to be received in the event of sale of an intangible asset should only be cash Select one: a. (ii) and (iv) only b. (i) and (ii) only c. (i) and (iv) only d. (i), (ii) and (iii) onlyResidual interest in the asset of an entity that remains after deducting its liabilities is? a. Liabilities b. Expense c. Owner’s Equity d. Assets
- When the amount of interest accrued shown in the adjustments, then it has to be: a. Deducted from discounts received on bills and shown in other liabilities b. Added to discounts received on bills and shown in other liabilities c. Added to discounts received on bills and shown in other assets d. Deducted from discounts on bills purchased and shown in fixed assetsS1: In an acquisition where the acquirer pays cash for the acquiree assets, thebook value of the acquirer. S2: In acquisition of assets for assets, the ownership structure of the acquiree does not change A. Both statements are incorrect.B. Only S1 is correct.C. Both statements are correct.D. Only S2 is correct.1. Assuming the investment is appropriately recognized as financial assets at amortized cost: What is the carrying value of the investment on December 31, 2020? 2. Assuming the investment is appropriately recognized as financial assets at amortized cost: Determine the gain or (loss) to be recorded upon the sale of the investment. 3. Assuming the investment is appropriately recognized as financial assets at amortized cost: How much interest income is to be recognized in 2021?