On January 1 of Year 1, Stealth Company sold a machine (classified as inventory) that had a list price of $21,600. The customer paid $3,600 cash and signed a three-year, $18,000 note that specified a stated rate of 3%. Annual interest on the full amount of the principal is payable each December 31. The principal is payable on December 31, three years later. The market rate for a note of this risk is 10%. Required a. Compute the present value of this note.
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- Spath Company borrows 75,000 by issuing a 4-year, noninterest-bearing note to a customer on January 1, 2019. In addition, Spath agrees to sell inventory to the customer at reduced prices over a 5-year period. Spaths incremental borrowing rate is 12%. The customer agrees to purchase an equal amount of inventory each year over the 5-year period so that a straight-line method of revenue recognition is appropriate. Required: Prepare the journal entries on Spaths books for 2019 and 2020. (Round answers to 2 decimal places.)On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan.On August 1, Batson Company issued a 60-day note with a face amount of $140,000 to Jergens Company for merchandise inventory. (Assume a 360-day year is used for interest computations.) a. Determine the proceeds of the note assuming the note carries an interest rate of 6%. $fill in the blank 1 b. Determine the proceeds of the note assuming the note is discounted at 6%.
- On August 1, Batson Company issued a 60-day note with a face amount of $85,200 to Jergens Company for merchandise inventory. (Assume a 360-day year is used for interest computations.) a. Determine the proceeds of the note assuming the note carries an interest rate of 12%. $ b. Determine the proceeds of the note assuming the note is discounted at 12%.On August 1, Batson Company issued a 60-day note with a face amount of $80,400 to Jergens Company for merchandise inventory. (Assume a 360-day year is used for interest computations.) a. Determine the proceeds of the note assuming the note carries an interest rate of 8%.fill in the blank 1 of 2$ b. Determine the proceeds of the note assuming the note is discounted at 8%.fill in the blank 2 of 2$On August 1, Batson Company issued a 60-day note with a face amount of $96,000 to Jergens Company for merchandise inventory. (Assume a 360-day year is used for interest calculations.) a. Determine the proceeds of the note assuming the note carries an interest rate of 6%.fill in the blank 1 b. Determine the proceeds of the note assuming the note is discounted at 6%.fill in the blank 2
- On August 1, Batson Company issued a 60-day note with a face amount of $140,000 to Jergens Company for merchandise inventory. (Assume a 360-day year is used for interest calculations.) a. Determine the proceeds of the note assuming the note carries an interest rate of 6%. b. Determine the proceeds of the note assuming the note is discounted at 6%.On April 1 of Year 1, Mountain Company sold merchandise and received a $34,800, three-year, noninterest-bearing note. The market rate is 10% . Mountain Company has a March 31 year-end. Use the effective interest method to amortize any discount. Required Prepare entries for Mountain Company on April 1 of Year 1, and March 31 of Year 2, Year 3, and Year 4. Note: Round answers to the nearest whole dollar. Date April 1, Year 1 Mar. 31, Year 2 Mar. 31, Year 3 Mar. 31, Year 4 Mar. 31, Year 4 Account Name To record sale of merchandise. To record interest on note. To record interest on note To record interest on note To record settlement of note << < < < < C Dr. Cr.JJ's Company completed the following transactions during the current accounting year ended December 31: March 1: Borrowed $25, 000 on a 2 year, 12% note. Interest is paid annually. April 1: Borrowed cash and signed a $20,000, 2 year, noninterest - bearing note. The market rate of interest for this level of risk was judged by the lender to be 12%. Throughout the year, sold merchandise worth $30, 000 that carried a 2 - year warranty for parts and labor. Jack estimates that the cost of any warranty repairs will be 1.5% of the total sales. As of December 31, actual warranty repair costs were $250. June 1: Jack co signed and guaranteed payment of a $50,000, 14%, 1 year note owed by Bob Corp, one of Jack's suppliers, in order to help them continue to supply Jack's needed parts. Jack believes that default by Bob is only reasonably possible. December sales revenue (excluding sales taxes collected) was $400,000. The sales tax rate is 5%. Jack had already paid the sales taxes owed on all…
- Vigeland Company completed the following transactions during Year 1. Vigeland’s fiscal year ends on December 31. January 15 Purchased and paid for merchandise. The invoice amount was $15,200; assume a perpetual inventory system. April 1 Borrowed $774,000 from Summit Bank for general use; signed a 10-month, 9% annual interest-bearing note for the money. June 14 Received a $24,000 customer deposit for services to be performed in the future. July 15 Performed $3,450 of the services paid for on June 14. December 12 Received electric bill for $26,160. Vigeland plans to pay the bill in early January. December 31 Determined wages of $15,000 were earned but not yet paid on December 31 (disregard payroll taxes). Required: Prepare journal entries for each of these transactions. Prepare the adjusting entries required on December 31.Bennett Enterprises issues a $400,000, 90-day, 5% note to Spectrum Industries for merchandise inventory. Assume a 360-day year. If an amount box does not require an entry, leave it blank. a. Journalize Bennett Enterprises' entries to record: 1. the issuance of the note. 2. the payment of the note at maturity. 1. 2. b. Journalize Spectrum Industries' entries to record: 1. the receipt of the note. 2. the receipt of the payment of the note at maturity. 1. 2.On April 1, Year 1, Halo Co. issued a $5,000 face value discount note to the Capri Bank. The note had a 12 percent discount rate and a one-year term. If Halo Co. earned $2,000 of revenue in Year 1, the amount of net income would be O $2,000 O $1,550 O $1,400 O $1,800