On April 1, 2020, ABC Corporation borrows $50,000 on a 6-month note that charges an annual interest rate of 3 percent. How much total cash will ABC pay when the note matures?
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- ExerciseInstallment Notes ABC bank loans $250,000 to Yossarian to purchase a new home. Yossarian will repay the note in equal monthly payments over a period of 30 years. The interest rate is 12%. Required: If the monthly payment is $2,571.53, how much of the first payment is interest expense and how much is principal repayment? (Note: Round to the nearest cent.)Problem 24Safari Bank granted a loan to a borrower on Jan. 1, 2020. The interest on the loan is 8% payable annually starting Dec. 31,2020. The loan matures in three years on Dec. 31,2022. Data related to the loan are:Principal amount 1,500,000Origination fees charged against the borrower 50,000Direct Origination cost incurred 130,150After consideration of the origination fees charged against the borrower and the direct origination cost incurred, the effective rate on the loan is 6%. Required:1. Prepare a table of amortization for the loan receivable.2. Prepare the journal entries for 2020, 2021 and 2022.Problem 24Safari Bank granted a loan to a borrower on Jan. 1, 2020. The interest on the loan is 8% payable annually starting Dec. 31,2020. The loan matures in three years on Dec. 31,2022. Data related to the loan are:Principal amount 1,500,000Origination fees charged against the borrower 50,000Direct Origination cost incurred 130,150After consideration of the origination fees charged against the borrower and the direct origination cost incurred, the effective rate on the loan is 6%. Required:1. Compute the carrying amount of the loan receivable on December 31,2020, December 31,2021, December 31,2022.2. Prepare a table of amortization for the loan receivable.
- PART 1. SIMPLE INTEREST, SIMPLE DISCOUNT, PROMISSORY NOTE. a. What is the principal invested from June 10, 2020 which will amount to 50,000 on October 20, 2021 using 14.8% simple interest? b. Find the simple discount on 12,000 due at the end of 1 year and 6 months with 7.5% simple discount rate. How much is the proceeds? c. Five J’s company received a 100,00 promissory note at 10% simple interest for 9 months from one of its customers. After 6 months, the note was discounted at a bank at a discount rate 7.8%. How much did the company receive from the discounted note?Problem 6 Luna Company discounted its own 2-year P500,000 12% interest bearing note at the bank onSeptember 1, 2020. The note was dated August 1, 2020. The discount rate was 15%. Preparethe journal entries relating to the said note starting September 1, 2020 until its payment.Problem 10 On December 31, 2020, Olaer Company received two P5,000,000 notes receivable from customers in exchanged for consulting services rendered. On both notes, interest is calculated on the outstanding principal balance at the annual rate of 4% and payable at maturity. The note from Nazareno Corporation, made under customary trade terms, is due on October 1, 2021 and the note from Mudag Corporation is due on December 31, 2025. The market interest rate for similar notes on December 31, 2020 was 10%. The compound interest factors to convert future value into present value at 10% follow: present value of 1 due in nine months, 0.93, and present value of 1 due in five years, 0.62. 1. At what amounts should these two notes receivable be reported in Nazareno’s December 31, 2020 statement of financial position? 2. At what amounts should these two notes receivable be reported in Mudag’s December 31, 2020 statement of financial position?
- PROBLEM 1 On December 31, 2023, JFG Company, a financing institution, lent P4,000,000 to MFG Company due 3 years after. The loan is supported by an 8% note receivable. Transaction costs incurred to originate the loan amounted to P248,000. P374,000 was chargeable to MFG as origination fees. Interest on the loan is collectible at the end of each year. The yield rate on the loan after considering the direct origination fees and origination costs incurred is 9.25%. JFG was able to collect interest as it became due at the end of 2024. During 2025, however, due to MFG Company's business deterioration and due to political instability and faltering global economy, the company was not able to collect amounts due at the end of 2025. After reviewing all available evidence at December 31, 2025, JFG determined that it was probable that MFG would pay back only P3,400,000 collectible as follows: December 31, 2027 December 31, 2028 December 31, 2029 December 31, 2030 P1,400,000 1,000,000 600,000…PROBLEM 8 On January 1, 2022, Clark Co. received a P3,000,000, 10% note from a customer upon the sale of its goods. The note is to be paid in six equal semi-annual installments, plus interest on the outstanding balance every June 30 and December 31, starting June 30, 2021. The effective rate on the note is 9%. 1. How much is the note upon initial recognition? 2. How much is the interest income recognized by Clark in 2022? 3. How much is the carrying amount of the note on December 31, 2023?Problem 8-16 On March 1, 2019, Alpha Company borrowed P1,000,000 and signed a 2 year note bearing interest at 12% per anum compounded annually. Interest is payable in full at maturity on February 28,2021. 1. What amount should be reported as accrued interest payable on December 31, 2020? A. 100,000 B. 120,000 C. 232,000 D. 240,000
- information on a note receivable at december 31,2021 face amount P800,000 effective interest rate 14% 5. the note is due in lump sum in five years' time what is the carrying amount of the note at December 3, 2021? 6. the note is due in four annual installments. the first installment is due at the end of the year. what is the crrying amount of the note at December 31? 7. the noted is due in five equal annual installments. the first installments is due in advance. What is the carrying amount of the note at December 31, 2021?Part XI: A Note Payable Carl's Candy Shop borrows $173,255 from Third Street Bank. This is a Note Payable, due in 4 years, with an annual interest rate of 6%. Interest is to be paid at the end of every year and the annual payment will also pay off some of the principal. The note was originated on January 1, 2021 and is due on December 31, 2024. The annual payment is $50,000. This covers both interest and principal. The number of periods is The annual interest rate is Complete the amortization table. Date 1/1/2021 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Totals Amortization Table for Carl's Candy Shop Periodic Payment Interest Expense % or A Decrease in Note Payable Show the journal entries necessary for the first year, 2021. 11 Book Valuefind the simple interest on 18,000 pesos at 17 ¼% from Feb. 4, 2021 to April 21,2021 note: use the bankers rule