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- On December 31, 2021, Ainsley Company finished consultation services and accepted exchange a zero interest bearing of $ 995,000 and a due date of December 31, 2024. The implied interest rate is 12%. The following interest factors are provided Table Factors For Three Periods Future Value of 1 Present Value of 1 Future Value of Ordinary Annuity of 1 Present Value of Ordinary Annuity of 1 Interest Rate 6% 12% 1.19102 1.40493 0.83962 0.71178 3.18360 3.37440 2.67301 2.40183 Instructions (a) Determine the present value of the note. (b) Prepare the journal entries for the initial transaction , recognition of Interest each year, and the colle Instructions: Compute both a must show your workOn January 1, 2019, Bank Dhofar issued CD in Muscat Securities Market which will mature in October 30, 2020. The CD pays 8 % interest rate. Calculate the interest earned on this CD with face value of 100000. Assume all month to be of 30 days. Select one: a. None of these b. 4835.50 OMR C. 5325.40 OMR d. 5260.27 OMROn March 2021, Company A enters a forward rate agreement(FRA) with company B to borrow $1 million at 4% between October 2021 and December 2021(three months). The term structure of interest rates is flat at 5%. The value of the FRA contract for Company A is
- On January 1, 2020, Company A issued 18% bearing note payable in ten semi-annual instalments every June 30 and December 31 starting June 30, 2020; P 5,0000,000. The market interest rate for this type of transaction is 10%. Get: Present Value/ Carrying Value Beg. Carrying Value December 31, 2022On January 1, 2024, an investor paid $299,000 for bonds with a face amount of $360,000. The contract rate of interest is 8% while the current market rate of interest is 10%. Using the effective interest method, how much interest income is recognized by the investor in 2025 (assume annual interest payments and amortization)? rev: 02_26_2021_QC_CS-252921• $30,010.• $30,160.• $29,900.• $28,204.Lopez Plastics Co. (LPC) issued callable bonds on January 1, 2021. LPC's accountant has projected the following amortization schedule from issuance until maturity: Date Cashinterest Effectiveinterest Decrease inbalance Outstandingbalance 1/1/2021 $ 207,020 6/30/2021 $ 7,000 $ 6,211 $ 789 206,230 12/31/2021 7,000 6,187 813 205,417 6/30/2022 7,000 6,163 837 204,580 12/31/2022 7,000 6,137 863 203,717 6/30/2023 7,000 6,112 888 202,829 12/31/2023 7,000 6,085 915 201,913 6/30/2024 7,000 6,057 943 200,971 12/31/2024 7,000 6,029 971 200,000 What is the annual effective interest rate on the bonds?
- K On December 31, 2024, when the market interest rate is 12%, McCann Realty issues $900,000 of 13.25%, 10-year bonds payable. The bonds pay interest semiannually. McCann Realty received $964,699 in cash at issuance. Requirements 1. Prepare an amortization table using the effective interest amortization method for the first two semiannual interest periods. (Round to the nearest dollar.) 2. Using the amortization table prepared in Requirement 1, journalize issuance of the bonds and the first two interest payments. Requirement 1. Prepare an amortization table using the effective interest amortization method for the first two semiannual interest periods. (Round to the nearest dollar.) Carrying Premium Amortized Amount 12/31/2024 06/30/2025 12/31/2025 Requirement 2. Using the amortization table prepared in Requirement 1, journalize issuance of the bonds and the first two interest payments. (Record debits first, then credits. Select explanations on the last line of the journal entry. Round…A debt of P20, 000 is due on December 1, 2020. What was the value of this debt on December 1, 2018 at 14% converted semi-annually? A P15,257.90 B P33,500.39 OP 28, 600.21 D P36,548,19For items 11 to 12 LYR Finance Company reports a loan receivable from Choice Company in the amount of P7,500,000. The initial loan's repayments include a 10% interest rate plus annual principal payment of P1,500,000 on January 1 of each year. The loan was made on January 1, 2021. Choice made the P750,000 interest payments for 2021 but did not make the P1,500,000 principal payment nor the P500,000 interest payment in 2022. Choice is having financial difficulty and LYR has concluded that the loan is impaired. Analysis of Choice's financial condition on December 31, 2022 indicates that the principal and interest currently due can be collected but it is probable that no further interest can be collected. The probable amounts and timing collection are determined as follows: December 31, 2023 December 31, 2024 December 31, 2025 Total P2,140,000 3,400,000 2,950,000 P8,490,000 The present value factors at 10% are as follows: 1 period - 0.909; 2 periods 0.826; 3 periods - 0.751 How much is the…
- $60,000, 5-year bonds, with a 10% stated rate of interest are issued at $64,867 on January 1, 2021. The market rate of interest is 8%. Interest payments are made semi-annually on June 30 and December 31. How much interest expense would be recognized on the second interest payment date? Assume effective-interest amortization is used. Round your answer to the nearest dollar.On March 31, 2020, Company A issued 18% bearing note payable in ten semi-annual instalments every September 30 and March 31 starting September 30, 2020; P 5,0000,000. The market interest rate for this type of transaction is 10%. Get: Present Value/ Carrying Value Beg. Carrying Value December 31, 2022Company AAA borrowed P1,000,000 on July 1, 2021 and issued a 9% one-year note payable every after three months starting September 30, 2021. The quarterly payments were P264,200 inclusive of interest. If Company AAA paid the required quarterly payments when due, what is the carrying value of the note payable on December 31, 2021? O P528,400 O P522,500 O P511,162 O P488,156
