None Jeremiah Company receives a three-year, $10,000, zero-interest-bearing note, and the related present value with a market interestrate of 9% is $7,721.80. The total discount of $2,278.20 under the straight-line method is amortized over the three-year period inequal amounts each year. Therefore, the annual amortization is $2,278.20÷3 or $759.40.Schedule of Note Discount AmortizationEffective Interest Method0% Note Discounted at 9%Cash ReceivedInterest IncomeDiscount AmortizedCarrying Amount of NoteDate of issue$7,721.80End of Year 1$0$694.96$694.968,416.76End of Year 20757.51757.519,174.27End of Year 3825.73825.7310,000$0$2,278.20$2,278.20Click here to view factor tablesPrepare the entry to record the annual interest for years 1 and 2 under the straight-line method and the effective interest method.(Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry"for the account titles and enter O for the amounts. List all debit entries before credit entries. For calculation purposes, use 5 decimal places as

Under straight line method, we simply debit interest expense and credit discount on bonds for the…

Answered: Jeremiah Company receives a three-year,…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 17P

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Sharapovich Inc. borrowed $50,000 from Kerber Bank and signed a 5-year note payable stating the interest rate was 5% compounded annually. Sharapovich Inc. will make payments of $11,548.74 at the end of each year. Prepare an amortization table showing the principal and interest in each payment.
Lime Co. incurs a $4,000 note with equal principal installment payments due for the next eight years. What is the amount of the current portion of the noncurrent note payable due in the second year? A. $800 B. $1,000 C. $500 D. nothing, since this is a noncurrent note payable
CPLF borrows P2,500,000 from Bank DAAE at 11% interest to be paid at the end of each year for 15 years. Find for the annual total payments under (a) equal annual amortization and (b) equal principal payment methods. Construct a complete amortization schedule (as shown below) for each scheme.
Company A borrows P2,000,000 from Bank at 12% interest to be paid at the end of each year for 15 years. Find for the annual total payments under (a) equal annual amortization (b) equal principal payment methods. Construct a completeamortization schedule (as shown below) for each scheme. Year Outstanding Balance Principal Payment Interest Payment Total Payment 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Considering the given information, find for the annual total payments undera. equal annual amortization b. equal principal payment methods if a 3-year graceperiod is charged on both principal and interest. Construct a complete amortization schedule for each scheme.
Sheridan Company receives a three-year, $9,200, zero-interest-bearing note, and the related present value with a market interest rate of 8% is $7,303.24. The total discount of $1,896.76 under the straight-line method is amortized over the three-year period in equal amounts each year. Therefore, the annual amortization is $1,896.76 ÷ 3 or $632.25. Date of issue End of Year 1 End of Year 2 End of Year 3 Cash Received Click here to view factor tables $0 0 $0 Schedule of Note Discount Amortization Effective Interest Method 0% Note Discounted at 8% Interest Income Discount Amortized $584.26 631.00 681.50 $1,896.76 $584.26. 631.00. 681.50 $1,896.76 Carrying Amount of Note $7,303.24 7,887.50 8,518.50 9,200 Prepare the entry to record the annual interest for years 1 and 2 under the straight-line method and the effective interest method. (Credit account titles are automatically indented when the amount is entered. Do not Indent manually. If no entry is required, select "No Entry" for the…
On Jan. 1, 2021, Muta Co. received a P1,200,000, noninterest bearing note in exchange for land with carrying amount of P1,000,000. The note is due in three equal annual installments every Dec. 31. The effective interest rate is 15%. The present value of ordinary annuity of 1 at 15% for 3 periods is 2.2832Requirements: 1. Prepare the amortization table. 2. Determine the current and non-current portions of the note on December 31, 2021. 3. Provide all the necessary journal entries.
On January 1, 2021, Pindang Co. received a P1,000,000, noninterest bearing note inexchange land with carrying amount of P1,000,000. The note is due in four equal annual installments every December 31. The effective interest rate is 15%. The present value of ordinary annuity of 1 at 15% for 4 periods is 2.855Requirements:1. Prepare the amortization table.2. Determine the current and non-current portions of the note on December 31,2021.3. Provide all the necessary journal entries.
3. On January 1, 20x1, Otters Co. issued a 3-year, noninterest bearing note of P1,200,000 in exchange for equipment. The note is due in three equal annual installments beginning on January 1, 20x1 and every January 1 thereafter. The effective interest rate is 10%. Requirements: a) Prepare amortization table; b) How much is the interest expense in 20x1?; c) How much is the carrying amount of the note on Dec 31, 20x1?
Towline Corporation borrowed S75,000.00 at 11% compounded monthly for 10 years to buy a warehouse. Equal payments are made at the end of every month. (a) Determine the size of the monthly payments (b) Compute the interest included in payment 37. (c) Determine the principal repaid in payment period 7. (d) Construct a partial amortization schedule showing details of the first three payments, the last three payments, and totals (a) The size of the monthly payment is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
K Locust Inc. owes $15,000.00 to be repaid by monthly payments of $510.00. Interest is 6% compounded monthly. (a) How many payments will Locust Inc. have to make? (b) (d) How much interest is included in the 12th payment? How much of the principal will be repaid in the 13th payment period? Construct a partial amortization schedule showing details of the first three payments, the last three payments, and totals. (a) The number of the monthly payment is (Round the final answer up to the nearest whole number. Round all intermediate values to six decimal places as needed.)
Locust Inc. owes $20,000.00 to be repaid by monthly payments of $510.00. Interest is 6% compounded monthly. (a) How many payments will Locust Inc. have to make? (b) How much interest is included in the 10th payment? (c) How much of the principal will be repaid in the 9th payment period? (d) Construct a partial amortization schedule showing details of the first three payments, the last three payments, and totals.
On 1/1/19, Lantana Loan Co., a calendar-year company, accepts a 5%, $500,000 three-year loan that pays interest semi-annually on 6/30 and 12/31 from Diamond Distributors, when the market rate of interest was 10%. In exchange for the note, Diamond agrees to make semi-annual Interest payments and repay the full $500,000 at maturity. Complete the amortization table for this note, then complete all journal entries for 2019. Answer: Beginning note balance is calculated using Excel PV function with the following inputs: Amortization Table: Journal Entries:

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