Question

At January 1, 2018, Brant Cargo acquired equipment by issuing a five-year, $150,000 (payable at maturity),...

At January 1, 2018, Brant Cargo acquired equipment by issuing a five-year, $150,000 (payable at maturity), 4% note. The market rate of interest for notes of similar risk is 10%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. to 3. Prepare the necessary journal entries for Brant Cargo. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final answers to nearest whole dollar.)

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
Amount PV factor Present value
Interest 6000 3.79079 22745
Principal 150000 0.62092 93138
Total 115883
Debit Credit
January 1, 2018 Equipment 115883
Discount on notes payable 34117
       Note payable 150000
December 31, 2018 Interest expense 11588 =115883*10%
        Discount on notes payable 5588
        Cash 6000
December 31, 2019 Interest expense 12147 =(115883+11588)*10%
        Discount on notes payable 6147
        Cash 6000
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
On January 1, 2018, Darnell Window and Pane issued $19.1 million of 10-year, zero-coupon bonds for...
On January 1, 2018, Darnell Window and Pane issued $19.1 million of 10-year, zero-coupon bonds for $7,363,877 (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 2. Determine the effective rate of interest. Inerest rate......? 3. Prepare the necessary journal entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermedaite...
On January 1, 2018, Darnell Window and Pane issued $18.1 million of 10-year, zero-coupon bonds for...
On January 1, 2018, Darnell Window and Pane issued $18.1 million of 10-year, zero-coupon bonds for $6,978,334. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 2. Determine the effective rate of interest. 1. & 3. to 5. Prepare the necessary journal entries.
On January 1, 2018, Maywood Hydraulics leased drilling equipment from Aqua Leasing for a four-year period...
On January 1, 2018, Maywood Hydraulics leased drilling equipment from Aqua Leasing for a four-year period ending December 31, 2021, at which time possession of the leased asset will revert back to Aqua. The equipment cost Aqua $434,644 and has an expected economic life of five years. Aqua expects the residual value at December 31, 2018, to be $70,000. Negotiations led to Maywood guaranteeing a $100,000 residual value. Equal payments under the lease are $140,000 and are due on December...
On January 1, 2018, Darnell Window and Pane issued $18.8 million of 10-year, zero-coupon bonds for...
On January 1, 2018, Darnell Window and Pane issued $18.8 million of 10-year, zero-coupon bonds for $6,621,068. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 2. Determine the effective rate of interest. 1. & 3. to 5. Prepare the necessary journal entries. Record the issuance of the bonds.Record annual interest expense at December 31, 2018.Record annual interest expense at December 31,...
On January 1, 2018, Rick’s Pawn Shop leased a truck from Chumley Motors for a five-year...
On January 1, 2018, Rick’s Pawn Shop leased a truck from Chumley Motors for a five-year period with an option to extend the lease for three years. Rick’s had no significant economic incentive as of the beginning of the lease to exercise the 3-year extension option. Annual lease payments are $14,000 due on December 31 of each year, calculated by the lessor using a 5% interest rate. The agreement is considered an operating lease. (FV of $1, PV of $1,...
On January 1, 2018, Robertson Construction leased several items of equipment under a two-year operating lease...
On January 1, 2018, Robertson Construction leased several items of equipment under a two-year operating lease agreement from Jamison Leasing, which routinely finances equipment for other firms at an annual interest rate of 4%. The contract calls for four rent payments of $40,000 each, payable semiannually on June 30 and December 31 each year. The equipment was acquired by Jamison Leasing at a cost of $360,000 and was expected to have a useful life of five years with no residual...
On January 1, 2018, Shirley Corporation purchased 12% bonds dated January 1, 2018, with a face...
On January 1, 2018, Shirley Corporation purchased 12% bonds dated January 1, 2018, with a face amount of $19 million. The bonds mature in 2027 (10 years). For bonds of similar risk and maturity, the market yield is 16%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: Determine the price of...
On January 1, 2018, Rare Bird Ltd. purchased 15% bonds dated January 1, 2018, with a...
On January 1, 2018, Rare Bird Ltd. purchased 15% bonds dated January 1, 2018, with a face amount of $34 million. The bonds mature in 2027 (10 years). For bonds of similar risk and maturity, the market yield is 11%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: Determine the price...
Universal Foods issued 10% bonds, dated January 1, with a face amount of $172 million on...
Universal Foods issued 10% bonds, dated January 1, with a face amount of $172 million on January 1, 2021 to Wang Communications. The bonds mature on December 31, 2035 (15 years). The market rate of interest for similar issues was 12%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. to...
On January 1, 2018, Darnell Window and Pane issued $18.7 million of 10-year, zero-coupon bonds for...
On January 1, 2018, Darnell Window and Pane issued $18.7 million of 10-year, zero-coupon bonds for $7,209,660. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT