2 3 On 1/1/19, Lantana Loan Co., a calendar-year company, accepts a 5%, $500,000 three-year loan that pays interest semi-annually on 6/30 and 12/31 from Diamond Distributors, when the market rate of interest was 10%. In exchange for the note, Diamond agrees to make semi-annual interest payments and repay the full $500,000 at maturity. Complete the amortization table for this note, then complete all journal entries for 2019. 45 6 7 Amortization Table: 8 9 Interest Effective Discount Note 10 Date Received Interest Amortized Balance 11 12 12

2 3 On 1/1/19, Lantana Loan Co., a calendar-year company, accepts a 5%, $500,000 three-year loan that pays interest semi-annually on 6/30 and 12/31 from Diamond Distributors, when the market rate of interest was 10%. In exchange for the note, Diamond agrees to make semi-annual interest payments and repay the full $500,000 at maturity. Complete the amortization table for this note, then complete all journal entries for 2019. 45 6 7 Amortization Table: 8 9 Interest Effective Discount Note 10 Date Received Interest Amortized Balance 11 12 12

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 1PA: On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10%...

See similar textbooks

Similar questions

Lime Co. incurs a $4,000 note with equal principal installment payments due for the next eight years. What is the amount of the current portion of the noncurrent note payable due in the second year? A. $800 B. $1,000 C. $500 D. nothing, since this is a noncurrent note payable
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.
Chemical Enterprises issues a note in the amount of $156,000 to a customer on January 1, 2018. Terms of the note show a maturity date of 36 months, and an annual interest rate of 8%. What is the accumulated interest entry if 9 months have passed since note establishment?
Jain Enterprises honors a short-term note payable. Principal on the note is $425,000, with an annual interest rate of 3.5%, due in 6 months. What journal entry is created when Jain honors the note?
On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10% interest rate. Each annual payment is in the amount of $39,569 and payment is due each Dec. 31. What is the journal entry on Jan. 1 to record the cash received and on Dec. 31 to record the annual payment? (You will need to prepare the first row in the amortization table to determine the amounts.)
On January 1, 20X1, Bouncy House, Inc. obtains a $50,000, 6 year, 8% installment note for the latest and greatest bouncy house. Bouncy House is required to make annual payments. The first payment occurs on December 31, 20X1. а. Calculate your annual payment amount. b. Create the loan amortization schedule (table). Record the first three journal entries. d. How much total interest does Bouncy House pay on this installment note? С.
On 1/1/19, Lantana Loan Co., a calendar-year company, accepts a 5%, $500,000 three-year loan that pays interest semi-annually on 6/30 and 12/31 from Diamond Distributors, when the market rate of interest was 10%. In exchange for the note, Diamond agrees to make semi-annual Interest payments and repay the full $500,000 at maturity. Complete the amortization table for this note, then complete all journal entries for 2019. Answer: Beginning note balance is calculated using Excel PV function with the following inputs: Amortization Table: Journal Entries:
2. On January 1, 20x1, J&J Co. issues a noninterest-bearing note of P3,000,000 in exchange for equipment. The note is due in three equal annual installments every December 31. The effective interest rate is 18%. Saibp an Requirements: a. Compute for current and noncurrent portions of the note payable on December 31, 20x1. b. Compute for the balance of discount on note payable on December 31, 20x1 and determine how this amount is allocated to the current and noncurrent portions of the note. c. Provide all the entries during the term of the note payable.
On January 1, Year 1, Bryson Company obtained a $36,000, four-year, 8% installment note from Campbell Bank. The note requires annual payments of $10,869, beginning on December 31, Year 1. Question Content Area a. Prepare an amortization table for this installment note, similar to the one presented in Exhibit 4. Note: Enter all amounts to the nearest whole dollar. Round Year 4 Interest Expense (up or down) to ensure the carrying amount is zero at the end of the note term. Amortization of Installment Notes Year EndingDecember 31 January 1Carrying Amount Note Payment(Cash Paid) Interest Expense(7% of January 1Note CarryingAmount) Decrease inNotes Payable December 31Carrying Amount Year 1 $fill in the blank b118f2fd6fc7fe2_3 $fill in the blank b118f2fd6fc7fe2_4 $fill in the blank b118f2fd6fc7fe2_5 Year 2 fill in the blank b118f2fd6fc7fe2_8 fill in the blank b118f2fd6fc7fe2_9 fill in the blank b118f2fd6fc7fe2_10 Year 3 fill in the…
● A company accepted a trade note from AB Enterprises, face value $3,000, 15 percent interest-bearing, dated August 18, maturing in 180 days. Assume 360 days in a year. Required: Sixty days prior to the maturity of the note, the company endorsed the note with recourse (discounted) to XY Finance Company at a 9 percent annual rate. Compute the following: (a) The company's proceeds from the note $ Computations: (b) The company's interest earned (net of discount) $_ Computations: (c) Give the journal entry for the company to record the discounting transaction, assuming that the end of their fiscal year is June 30. The discount is to be recorded as a sale. Assume interest revenue was not recorded before the discounting.
On January 1, Year 1, Zero Company obtained a $52,000, 4-year, 6.5% installment note from Regional Bank. The note requires annual payments of $15,179, beginning on December 31, Year 1. The December 31, Year 2 carrying amount in the allocation of periodic payments table for this installment note will be equal to Question 3 options: $26,000 $27,635 $21,642 $28,402
On January 1, Year 1, Bryson Company obtained a $147,750, four-year, 7% installment note from Campbell Bank. The note requires annual payments of $43,620, beginning on December 31, Year 1.a. Prepare an amortization table for this installment note, similar to the one presented in Exhibit 4.b. Journalize the entries for the issuance of the note and the four annual note payments.c. Describe how the annual note payment would be reported in the Year 1 income statement. Exhibit 4 Attached