Do not give answer in image On January 1, 2025, Sage Hill Company loans $202,008 to Oriole Corporation in exchange for a $240,000 zero-interest-bearing notepayable in 2 years. The market rate of interest for a transaction of this nature for Oriole is 9%. The present value of 1, 2 years out at9% is 0.8417.Sage Hill Company has a calendar year-end and it uses the effective-interest method.(a)Your answer is correct.Prepare journal entries on 1/1/25 to recognize the loan for Sage Hill Company. (Credit account titles are automatically indentedwhen the amount is entered. Do not indent manually. List debit entry before credit entry.)(b)Date Account Titles and Explanation1/1/25Notes ReceivableDiscount on Notes ReceivableCasheTextbook and MediaList of AccountsYour answer is partially correct.Date Account Titles and Explanation12/31/25 Discount on Notes ReceivableInterest RevenueDebiteTextbook and Media240000Prepare the journal entry to recognize interest on 12/31/25 for Sage Hill Company. (Credit account titles are automatically indentedwhen the amount is entered. Do not indent manually. List debit entry before credit entry. Round answers to O decimal places, e.g. 5,275.)CreditDebit37992202008Attempts: 1 of 15 usedCredit

Effective interest method is used for allocating interest expense over the life of a bond or any…

Your answer is partially correct. Prepare the journal entry to recognize interest on 12/31/25 for Sage Hill Company. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List debit entry before credit entry. Round answers to O decimal places, e.g. 5,275.) Date Account Titles and Explanation 12/31/25 Discount on Notes Receivable Interest Revenue eTextbook and Media Debit Credit

Your answer is partially correct. Prepare the journal entry to recognize interest on 12/31/25 for Sage Hill Company. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List debit entry before credit entry. Round answers to O decimal places, e.g. 5,275.) Date Account Titles and Explanation 12/31/25 Discount on Notes Receivable Interest Revenue eTextbook and Media Debit Credit

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 28E: On January 1, 2019, Northfield Corporation becomes delinquent on a 100,000, 14% note to First...

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On January 1, 2019, Northfield Corporation becomes delinquent on a 100,000, 14% note to First National Bank, on which 16,651 of interest has accrued. On January 2, 2019, the bank agrees to restructure the note. It forgives the accrued interest, extends the repayment date to December 31, 2021, and reduces the interest rate to 10%. Required: Prepare a schedule for Northfield to compute the annual interest expense in regard to the preceding note for each year of the restructuring agreement.
On July 1, 2019, Aldrich Company purchased as an available-for-sale security 200,000 face value, 9% U.S. Treasury notes for 194,000. The notes mature July 1, 2020, and pay interest semiannually on January 1 and July 1. The notes were sold on December 1, 2019, for 199,000. Aldrich normally uses straight-line amortization on all of its notes. In its income statement for the year ended December 31, 2019, what amount should Aldrich report as a gain on the sale of the available-for-sale security? a. 2,500 b. 3,500 c. 5,000 d. 6,000
On January 1, 2025, Shetland Company loans $252,510 to Durham Corporation in exchange for a $300,000 zero-interest-bearing note payable in 2 years. The market rate of interest for a transaction of this nature for Durham is 9%. The present value of 1, 2 years out at 9% is 0.8417. Shetland Company has a calendar year-end and it uses the effective-interest method. (a) Prepare journal entries on 1/1/25 to recognize the loan for Shetland Company (b) Prepare the journal entry to recognize interest on 12/31/25 for Shetland Company. (c) Prepare the journal entry to recognize interest on 12/31/26 for Shetland Company. (d) Prepare the journal entry to recognize receipt of payment of the note on 01/01/2027 for Shetland Company.
On January 1, 2025, Shetland Company loans $252,510 to Durham Corporation in exchange for a $300,000 zero-interest-bearing note payable in 2 years. The market rate of interest for a transaction of this nature for Durham is 9%. The present value of 1, 2 years out at 9% is 0.8417. Shetland Company has a calendar year-end and it uses the effective-interest method. Prepare journal entries on 1/1/25 to recognize the loan for Shetland Company
On January 1, 2020, ABC Co. borrowed P5,000,000 from a bank at a variable rate of interest for 4 years. Interest will be paid annually to the bank on December 31, and the principal is due on December 31, 2023. Under the agreement, the market rate of interest on each January 1 resets the variable rate for that period and the amount of interest to be paid on December 31. To protect itself from fluctuations in interest rate, the entity hedged the variable interest by entering into a four-year “receive variable, pay fixed” interest rate swap with a speculator. The interest rate swap s based on the notional amount of P5,000,000 and an 8% fixed interest rate. This agreement means that the entity will receive a swap payment from the speculator if the market rate on January 1 is more than 8% and will make a swap payment to the speculator if the market rate on January 1 is lower than 8%. The swap payments are made at the end of each year. The entity has designated this interest rate swap as…
On April 1, 2025, Sunland Company assigns $504,100 of its accounts receivable to the Third National Bank as collateral for a $314,000 loan due July 1, 2025. The assignment agreement calls for Sunland to continue to collect the receivables. Third National Bank assesses a finance charge of 4% of the accounts receivable, and interest on the loan is 10% (a realistic rate of interest for a note of this type). (a) Prepare the April 1, 2025, journal entry for Sunland Company. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Date Apr. 1, 2025 Account Titles and Explanation Debit Credit
(b) On April 1, 2025, Marigold Company assigns $505,300 of its accounts receivable to the Third National Bank as collateral for a $327,200 loan due July 1, 2025. The assignment agreement calls for Marigold to continue to collect the receivables. Third National Bank assesses a finance charge of 4% of the accounts receivable, and interest on the loan is 10% (a realistic rate of interest for a note of this type). (a) Your answer is correct. Prepare the April 1, 2025, journal entry for Marigold Company. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Date Account Titles and Explanation Apr. 1, Cash 2025 Interest Expense Notes Payable eTextbook and Media List of Accounts Debit 306988 20212 Credit 327200 Attempts: 1 of 2 used Prepare the journal entry for Marigold's collection of $378,200 of the…
On Jan. 31, 2022, ABC Corp. agreed with the bank a P5,000,000 loan to be credited to ABC on May 1, 2022. The prevailing interest rate on Jan. 31 was 7% but they also entered into a forward rate agreement (FRA) 3-12 to set the interest of the future loan at 8%. The actual interest rate on May 1 was 10%. How much is the interest expense of ABC for the whole term of the loan?
On December 31, 2019, Leni Company, a financing institution lent P10,000,000 to Digong Corp. due 3 years after. The loan is supported by an 10% note receivable. Based on the company’s initial estimates the present value of the 12 months expected credit loss (ECL) discounted at 9% is at 1,000,000. The probability of default (PD) is at 5%. Leni Company was able to collect interest as it became due at the end of 2020. There was no evidence of significant increase in credit risk by the end 2020 and that the receivable is determined to have “low credit risk”. There were no changes in its initial estimate of the 12 months expected credit loss either. By the end of 2021, Leni Company was able to collect interest as it became due. Based on available forward-looking information (determinable without undue cost or effort), however, there is an evidence that there was a significant increase in credit risk by the end of 2021. Leni Company therefore had to change its basis of calculation of the…
On January 1, 2022, Cat Corporation sold goods to Rat Company. Rat Company signed a non-interest-bearing note requiring payment of P600,000 annually for seven years. The first paymentwas made on January 1, 2022. The prevailing rate of interest for this type of note at date ofissuance was 10%. PV of an ordinary annuity of 1 at 10% for 6 periods 4.36PV of an ordinary annuity of 1 at 10% for 7 periods 4.871. What is the amount of Sales Revenue credited on January 1, 2022?2. What is the carrying amount of note receivable on December 31, 2022?
On April 1, 2020, Bonita Company assigns $533,000 of its accounts receivable to the Third National Bank as collateral for a $332,400 loan due July 1, 2020. The assignment agreement calls for Bonita to continue to collect the receivables. Third National Bank assesses a finance charge of 3% of the accounts receivable, and interest on the loan is 10% (a realistic rate of interest for a note of this type). Prepare the April 1, 2020, journal entry for Bonita Company. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
On April 1, 2020, Bonita Company assigns $533,000 of its accounts receivable to the Third National Bank as collateral for a $332,400 loan due July 1, 2020. The assignment agreement calls for Bonita to continue to collect the receivables. Third National Bank assesses a finance charge of 3% of the accounts receivable, and interest on the loan is 10% (a realistic rate of interest for a note of this type). On July 1, 2020, Bonita paid Third National all that was due from the loan it secured on April 1, 2020. Prepare the journal entry to record this payment. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)