Corona Industries purchased a stamping machine on January 2,
2018, for $100,000. It made an initial...
Corona Industries purchased a stamping machine on January 2,
2018, for $100,000. It made an initial payment of $20,000 and
financed the balance over 5 years at State Bank. The loan terms
were for annual payments of $16,000 plus 10% interest, payable on
December 31 each year. The year 2021 proves to be a difficult year
and on December 1, 2021 Corona negotiates a debt restructuring with
State Bank. The settlement calls for cash payment of accrued
interest plus $4,000...
Part 1
Part 2
P10-5 (L01,3) (Classification of Costs and Interest
Capitalization)
On January 1, 2017,...
Part 1
Part 2
P10-5 (L01,3) (Classification of Costs and Interest
Capitalization)
On January 1, 2017, Blair Corporation purchased for $500,000 a
tract of land (site number 101) with a building. Blair paid a real
estate broker’s commission of $36,000, legal fees of $6,000, and
title guarantee insurance of $18,000. The closing statement
indicated that the land value was $500,000 and the building value
was $100,000. Shortly after acquisition, the building was razed at
a cost of $54,000.
Blair entered...
On December 31, 2017, ABC enters into a debt restructuring
agreement with GG Bank. The bank...
On December 31, 2017, ABC enters into a debt restructuring
agreement with GG Bank. The bank agrees to restructure a 6.75%
(issued at par) $30,000,000 bond by making the following
modifications:
1. reducing the principal obligation from $30,000,000 to
$24,000,000.
2. extending the maturity date from December 31, 2017, to January
1, 2027.
3. reducing the interest rate from 6.75% to 6.00%. ABC’s market
interest rate is currently 15% due to its risk profile, i.e.
declining revenue and earnings.
Market...
Whispering Inc. has decided to purchase equipment from Central
Michigan Industries on January 2, 2017, to...
Whispering Inc. has decided to purchase equipment from Central
Michigan Industries on January 2, 2017, to expand its production
capacity to meet customers’ demand for its product. Whispering
issues a(n) $832,000, 5-year, zero-interest-bearing note to Central
Michigan for the new equipment when the prevailing market rate of
interest for obligations of this nature is 11%. The company will
pay off the note in five $166,400 installments due at the end of
each year over the life of the note.
Prepare...
On July 9, 2018, Omar Co. purchased a machine for
260,000 SA from Saudi Machine Company...
On July 9, 2018, Omar Co. purchased a machine for
260,000 SA from Saudi Machine Company (SMC). Omar gave SMC 7% note
due in 120 days in payment for the machine. (5
Points)
What is the maturity date of the note?
How much interest will Omar pay to SMC on this note?
Pass the Journal entry for Notes Receivable transaction.
On October 16, 2018, Omar informs us that the company is unable
to pay the note or interest?
What adjusting...
1?Straight Industries purchased a large piece of equipment from
Curvy Company on January 1, 2016. Straight...
1?Straight Industries purchased a large piece of equipment from
Curvy Company on January 1, 2016. Straight Industries signed a
note, agreeing to pay Curvy Company $430,000 for the equipment on
December 31, 2018. The market rate of interest for similar notes
was 8%. The present value of $430,000 discounted at 8% for three
years was $341,348. On January 1, 2016, Straight Industries
recorded the purchase with a debit to equipment for $341,348 and a
credit to notes payable for $341,348....
Larkspur Inc. has decided to purchase equipment from Central
Michigan Industries on January 2, 2017, to...
Larkspur Inc. has decided to purchase equipment from Central
Michigan Industries on January 2, 2017, to expand its production
capacity to meet customers’ demand for its product. Larkspur issues
a(n) $912,000, 5-year, zero-interest-bearing note to Central
Michigan for the new equipment when the prevailing market rate of
interest for obligations of this nature is 11%. The company will
pay off the note in five $182,400 installments due at the end of
each year over the life of the note.
a...
The following are Marin Corp.’s comparative balance sheet
accounts at December 31, 2017 and 2016, with...
The following are Marin Corp.’s comparative balance sheet
accounts at December 31, 2017 and 2016, with a column showing the
increase (decrease) from 2016 to 2017.
COMPARATIVE BALANCE SHEETS
2017
2016
Increase
(Decrease)
Cash
$813,400
$705,900
$107,500
Accounts receivable
1,123,400
1,156,600
(33,200
)
Inventory
1,863,500
1,731,800
131,700
Property, plant, and equipment
3,302,300
2,988,100
314,200
Accumulated depreciation
(1,162,900
)
(1,033,700
)
(129,200
)
Investment in Myers Co.
307,100
276,600
30,500
Loan receivable
252,200
—
252,200
Total assets
$6,499,000
$5,825,300
$673,700
Accounts...
1. Cambridge Company purchased a truck on January 1, 2018.
Cambridge paid $15,000 for the truck....
1. Cambridge Company purchased a truck on January 1, 2018.
Cambridge paid $15,000 for the truck. The truck is expected to have
a $2,500 residual value and a 5-year life. Cambridge has a December
31 fiscal year end. Using the double-declining balance method, how
much is the 2019 depreciation expense? (Enter only whole dollar
values.) Hint: what is the year 2 depreciation amount?
2. Cambridge Company purchased a truck on January 1,
2018. Cambridge paid $22,000 for the truck. The...
1.On 5/2/17, Anna Company purchased $100,000 of the 9%, 10-year
bonds of Dexter Corporation for $106,247,...
1.On 5/2/17, Anna Company purchased $100,000 of the 9%, 10-year
bonds of Dexter Corporation for $106,247, which provides an 8%
return on annual interest payments made every 5/1. Anna
does not intend to hold the bonds until maturity, but will hold
them for longer than a year. The market value of the
bonds at 12/31/17 is $106,100 and at 12/31/18 is
$106,000. On 3/1/19, Anna sells the bonds for
$105,950. What journal entries will Anna make in 2017
and 2018 to appropriately record these...