Notes payable Notes Payable is a written promise to pay a certain amount on a future date, with certain percentage of interest. Companies use to issue notes payable to meet short-term financing needs. To Prepare: The journal entry to record the purchase of the equipment.

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Answer 1

Question

Chapter 14, Problem 14.11P

(1)

To determine

Notes payable

Notes Payable is a written promise to pay a certain amount on a future date, with certain percentage of interest. Companies use to issue notes payable to meet short-term financing needs.

To Prepare: The journal entry to record the purchase of the equipment.

(2)

To determine

To Prepare: The journal entry to record the interest expense.

(3)

To determine

To Prepare: The journal entry to record the interest expense.

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Problem 26 On January 1, 2021, Divino Company sold equipment with carrying amount of P800,000 to Jocelle Company. As payment, Jocelle gave Divino Company a P1,200,000 note. The note bears an interest rate of 5% and is to be repaid in three annual installments of P400,000 plus interest on outstanding balance. The first payment was received on December 31, 2021. The market price of the equipment is not readily determinable. The prevailing rate of interest for notes of this type is 10%. The interest income to be recognized in 2022 is:

Problem 19 Marianne Company is a dealer in equipment. On December 31, 2019, Marianne Company sold equipment in exchange for a noninterest bearing note requiring five annual payments of P1, 000,000. The first payment was made on December 31, 2020. The market interest for similar notes was 8%. The relevant present value factors are: PV of lat 8% for 5 periods PV of an ordinary annuity of 1 at 8% for 5 periods 0.68 3.99 In its December 31, 2020statement of financial position, what should Marianne report as note receivable? а. 4, 000,000 b. 3,990,000 с. 3,309,200 d. 4,309,200

Problem 15 On December 31, 2017, Entity Z acquired Lumangyao Corporation’s P1,000,000 notes for P927,880. The market interest rate at that time was 12%. The stated interest rate was 10%, payable annually. The notes mature in five years and classified as financial asset at amortized cost. At December 31, 2019, the note is considered credit impaired. Entity Z determined that it was probable that the issuer would pay back only P600,000 of the principal at maturity. At December 31, 2020, because of the improvement in the credit rating of Lumangyao, Entity Z reassessed the collectibility of the note and now expects to collect P900,000 from Lumangyao at maturity date. The required loss allowance at Dec. 31, 2019 is The impairment gain to be recognized in 2020 is

Answer 2

Question

Chapter 14, Problem 14.11P

(1)

To determine

Notes payable

Notes Payable is a written promise to pay a certain amount on a future date, with certain percentage of interest. Companies use to issue notes payable to meet short-term financing needs.

To Prepare: The journal entry to record the purchase of the equipment.

(2)

To determine

To Prepare: The journal entry to record the interest expense.

(3)

To determine

To Prepare: The journal entry to record the interest expense.

Expert Solution & Answer

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Answer 3

Question

Chapter 14, Problem 14.11P

(1)

To determine

Notes payable

Notes Payable is a written promise to pay a certain amount on a future date, with certain percentage of interest. Companies use to issue notes payable to meet short-term financing needs.

To Prepare: The journal entry to record the purchase of the equipment.

(2)

To determine

To Prepare: The journal entry to record the interest expense.

(3)

To determine

To Prepare: The journal entry to record the interest expense.

Expert Solution & Answer

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Answer 4

Question

Chapter 14, Problem 14.11P

(1)

To determine

Notes payable

Notes Payable is a written promise to pay a certain amount on a future date, with certain percentage of interest. Companies use to issue notes payable to meet short-term financing needs.

To Prepare: The journal entry to record the purchase of the equipment.

(2)

To determine

To Prepare: The journal entry to record the interest expense.

(3)

To determine

To Prepare: The journal entry to record the interest expense.

Expert Solution & Answer

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Answer 5

Chapter 14, Problem 14.11P

(1)

To determine

Notes payable

Notes Payable is a written promise to pay a certain amount on a future date, with certain percentage of interest. Companies use to issue notes payable to meet short-term financing needs.

To Prepare: The journal entry to record the purchase of the equipment.

(2)

To determine

To Prepare: The journal entry to record the interest expense.

(3)

To determine

To Prepare: The journal entry to record the interest expense.

Answer 6

Chapter 14, Problem 14.11P

(1)

To determine

Notes payable

Notes Payable is a written promise to pay a certain amount on a future date, with certain percentage of interest. Companies use to issue notes payable to meet short-term financing needs.

To Prepare: The journal entry to record the purchase of the equipment.

Answer 7

Chapter 14, Problem 14.11P

(1)

To determine

Notes payable

Notes Payable is a written promise to pay a certain amount on a future date, with certain percentage of interest. Companies use to issue notes payable to meet short-term financing needs.

To Prepare: The journal entry to record the purchase of the equipment.

Answer 8

(2)

To determine

To Prepare: The journal entry to record the interest expense.

Answer 9

(2)

To determine

To Prepare: The journal entry to record the interest expense.

Answer 10

(3)

To determine

To Prepare: The journal entry to record the interest expense.

Answer 11

(3)

To determine

To Prepare: The journal entry to record the interest expense.

Answer 12

Expert Solution & Answer

Answer 13

Expert Solution & Answer

Answer 14

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Answer 15

Ch. 14 - How is periodic interest determined for...Ch. 14 - As a general rule, how should long-term...Ch. 14 - How are bonds and notes the same? How do they...Ch. 14 - What information is contained in a bond indenture?...Ch. 14 - On January 1, 2018, Brandon Electronics issued 85...Ch. 14 - How is the price determined for a bond (or bond...Ch. 14 - A zero-coupon bond pays no interest. Explain.Ch. 14 - Prob. 14.8Q Ch. 14 - Compare the two commonly used methods of...Ch. 14 - Prob. 14.10Q

Notes payable Notes Payable is a written promise to pay a certain amount on a future date, with certain percentage of interest. Companies use to issue notes payable to meet short-term financing needs. To Prepare: The journal entry to record the purchase of the equipment.

Solution Summary: The author explains that notes payable are written promises to pay a certain amount, with certain percentage of interest. Companies use them to meet short-term financing needs.

Notes payable

Notes Payable is a written promise to pay a certain amount on a future date, with certain percentage of interest. Companies use to issue notes payable to meet short-term financing needs.

To Prepare: The journal entry to record the purchase of the equipment.

To Prepare: The journal entry to record the interest expense.

To Prepare: The journal entry to record the interest expense.

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Chapter 14 Solutions