Homework Answers
Solution
| Accounts title and explanation | Debit | credit |
| Trucks | $ 56,914 | |
| Discount on notes payable | $ 29,486 | |
| Notes payable | $ 86,400 | |
| (To record issue of notes payable) |
Value of truck= 86400 x PV factor @11% at year 4 end
Value of truck = 86400 x 0.65873= $56914
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Bref Exercise 10-05 Martinez Corporation purchased a truck by issuing an $110,400, 4 year, zero-interest-bearing note...
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Brief Exercise 10-05 Pearl Corporation purchased a truck by issuing an $86,400, 4-year, zero-interest-bearing note to...
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over the 5-year period. The market rate of interest for similar
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(Round present value factor calculations to 5 decimal
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38,548. If no...
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On December 31, 2020, Carla Co. performed environmental consulting services for Hayduke Co. Hayduke was short...
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result, at December 31, 2019, BLANK Bank determined that it was
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market rate of interest on loans of this nature is now 10%.
Prepare the entry to record the issuance of the...
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Coronado Corporation purchased a truck by issuing an $84,800, 4-year, zero-interest-bearing note to Equinox Inc. The market rate of interest for obligations of this nature is 11%. Prepare the journal entry to record the purchase of this truck. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry"...
Bref Exercise 10-05 Martinez Corporation purchased a truck by issuing an $110,400, 4 year, zero-interest-bearing note to Equinox Inc. The market rate of interest for obligations of this nature is 9%. Prepare the journal entry to record the purchase of the truck (Round present value factor calculations te decimal places 1.25124 and final answers to decimal places 5.275. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry...
Brief Exercise 10-05 Pearl Corporation purchased a truck by issuing an $86,400, 4-year, zero-interest-bearing note to Equinox Inc. The market rate of interest for obligations of this nature is 11% Prepare the journal entry to record the purchase of this truck. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answers to 0 decimalplaces, e.g. 5,275. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select...
Kingbird Corporation issued a 5-year, $68,000,
zero-interest-bearing note to Garcia Company on January 1, 2020,
and received cash of $68,000. In addition, Kingbird agreed to sell
merchandise to Garcia at an amount less than regular selling price
over the 5-year period. The market rate of interest for similar
notes is 12%.
Prepare Kingbird Corporation’s January 1 journal entry.
(Round present value factor calculations to 5 decimal
places, e.g. 1.25124 and final answer to 0 decimal places, e.g.
38,548. If no...
Steve Acrobats lent $13,798 to Donaldson, Inc., accepting Donaldson's 2-years, $17,000, zero-interest-bearing note. The implied interest rate is 11% Prepare Steve's journal entries for the initial transaction, recognition of interest each year, and the collection of $17,000 at maturity. (Round answers to 0 decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)...
On December 31, 2020, Carla Co. performed environmental consulting services for Hayduke Co. Hayduke was short of cash, and Carla Co. agreed to accept a $318,100 zero-interest-bearing note due December 31, 2022, as payment in full. Hayduke is somewhat of a credit risk and typically borrows funds at a rate of 11%. Carla is much more creditworthy and has various lines of credit at 5% - Your answer is partially correct. Prepare the journal entry to record the transaction of...
On December 31, 2017, BLANK Company borrowed $67,008 from BLANK
Bank, signing a 5-year, $103,100 zero-interest-bearing note. The
note was issued to yield 9% interest. Unfortunately, during 2019,
BLANK company began to experience financial difficulty. As a
result, at December 31, 2019, BLANK Bank determined that it was
probable that it would receive back only $77,325 at maturity. The
market rate of interest on loans of this nature is now 10%.
Prepare the entry to record the issuance of the...
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