GEN COMBO LOOSELEAF INTERMEDIATE ACCOUNTING; CONNECT ACCESS CARD
9th Edition
ISBN: 9781260089042
Author: J. David Spiceland
Publisher: McGraw-Hill Education
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Chapter 21, Problem 21.12E
Installment note; statement of cash flow effects
• LO21–3, LO21–6
National Food Services, Inc., borrowed $4 million from its local bank on January 1, 2018, and issued a 4-year installment note to be paid in four equal payments at the end of each year. The payments include interest at the rate of 10%. Installment payments are $1,261,881 annually.
Required:
What would be the amount(s) related to the note that National would report in its statement of
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Exercise 5-20 (Algo) Deferred annuities; solving for annuity amount [LO5-8, 5-9]
On April 1, 2024, Antonio purchased appliances from the Acme Appliance Company for $500. In order to increase sales,
Acme allows customers to pay in installments and will defer any payments for six months. Antonio will make 18 equal
monthly payments, beginning October 1, 2024. The annual interest rate implicit in this agreement is 24%.
Required:
Calculate the monthly payment necessary for Antonio to pay for his purchases.
Note: Use tables, Excel, or a financial calculator. Do not round intermediate calculations. Round your final answers to
nearest whole dollar amount. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
Monthly payment
Problem 25Davao Bank loaned P7,500,000 to a borrower on January 1, 2018. The terms of the loan were payment in full on January 1, 2023, plus annual interest payment at 12%. The interest payment was made as scheduled on January 1, 2019. However, due to financial setbacks, the borrower was unable to make its 2020 interest payment and Davao Bank considers the loan impaired and projects the cash flows from the loan as of December 31, 2020. The bank has accrued the interest at December 31, 2019, but did not continue to accrue interest for 2020 due to the impairment of the loan. The projected cash flows are:
Date of cash flow Amount projectedas of Dec. 31, 2020December31, 2021 500,000December31, 2022 1,000,000December31, 2023 2,000,000December31, 2024 4,000,000The present value at l2% is as follows:For one period 0.89For two periods 0.80For three periods 0.71For four periods 0.64
Required:1.Prepare a table of amortization for the loan receivable.2. Prepare journal entries for 2018 – 2024.
Problem 5-9 (Algo) Noninterest-bearing note; annuity and lump-sum payment [LO5-3, 5-8]
On January 1, 2024, The Barrel Company purchased merchandise from a supplier. Payment was a noninterest-bearing note requiring
five annual payments of $35,000 on each December 31 beginning on December 31, 2024, and a lump-sum payment of $250,000 on
December 31, 2028. A 12% interest rate properly reflects the time value of money in this situation.
Required:
Calculate the amount at which Barrel should record the note payable and corresponding merchandise purchased on January 1, 2024.
Note: Round your final answers to nearest whole dollar amount. Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA
of $1, PVA of $1, FVAD of $1 and PVAD of $1)
Time values are based on:
n =
Cash Flow
i=
Amount
Present Value
Payments
Lump Sum
Amount recorded
Chapter 21 Solutions
GEN COMBO LOOSELEAF INTERMEDIATE ACCOUNTING; CONNECT ACCESS CARD
Ch. 21 - Effects of all cash flows affect the balances of...Ch. 21 - Prob. 21.2QCh. 21 - Prob. 21.3QCh. 21 - Prob. 21.4QCh. 21 - Prob. 21.5QCh. 21 - Prob. 21.6QCh. 21 - Prob. 21.7QCh. 21 - The sale of stock and the sale of bonds are...Ch. 21 - Does the statement of cash flows report only...Ch. 21 - Prob. 21.10Q
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