On January 1, 2020, James Co. received a 10% five-year note from a customer. Interest paid is every December 31. The note has face value of Php12,000,000. The effective rate on the of receipt of the no was 12%. Given: PV factor Principal PV factor Annuity/Coupon 0.5674 3.6048
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1. Determine the initial amount of the note
2. Compute for the discount
3. Compute for the interest income in the first year
Step by step
Solved in 4 steps
- 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, 2021, Mahogany Company issued a note with a face amount of P2,000,000. The note carried an interest rate of 10% payable every yearend for three years. The market rate of interest on similar notes is 12.5%. How much is the carrying amount of the note on December 31, 2021?On jan 1 2022, rodney inc provided services to smith's company in exchange for smith's $300000, 2 year 8% note with interest compound semi annually on july 1 and jan 1. The current market rate of similar notes is 12%. What are the input value on the financial calculator?
- On Jan 1, 20X1, ABC Corp received a P300,000 3-year note from a customer. The principal and interest of the note is collectible annually starting Dec 31, 20X1. Effective interest rate is 10% . How is the value of the note at December 31, 20X1? PV of P1 at 10% for 3n = .75131 PV of ordinary annuity of P1 at 10% for 3n = 2.48685 248,685 200,000 173,553 100,000On January 1, 2020, MP's customer issued a 3 year 8% note, PHP 3,000,000 for services billed to be paid installment, 1,000,000 every December of the year. What is the carrying amount as at December 31, 2020. The prevailing interest rate is 10%Solar Co. sold a machine in exchange for a P800,000, 4-year, S note, interest is payable annually. Prevailing market rate of interest for this type of note is 10% wrt How much is the carrying amount of the note receivable on January 1, 2021? How much is the carrying amount of the note receivable on December 31, 2021? ments How much is the interest income received on December 31, 2023? ences ( Previous ssors dents
- On January 1, 2021, Mahogany Company issued a note with a face amount of P2,000,000. The note carried an interest rate of 10% payable every yearend for three years. The market rate of interest on similar notes is 12.5%. How much is the interest expense for 2022 and carrying amount of the note on December 31, 2021USE THE FOLLOWING INFORMATION FOR NOS. 19 AND 20. ROUND ALL AMOUNTS TO THE NEAREST PESO On July 1, 2020, Jason Corporation pledged P5,000,000 of its accounts receivable to Philippine Bank as security for a P2,000,000 loan. The term of the loan is for one year and discounted at 12%. The journal entry to record the loan proceeds will show a debit to A) Commission Expense 240,000 Discount on Notes Payable 240,000 C. Recourse Obligation 240,000 Factor Holdback 240,000 Last saved 江 %23 P Type here to searchOn January 1,2022, Ace Company finished landscaping services and accepted in exchange a 5% $400000 promissory note with a due date of December 31,2024. Interest is receivable at January 1 each year. Notes with similar risks have a market rate of interest of 10%. (A.) Determine the value of the following N, I/Y, PMT, FV. B The present value of the note was $_______. (C) Prepare a schedule of Note Discount/Premium Amortization for Ace Company under the effect interest method. (d) Prepare the journal entries for Jan 1 2022 and Dec 31 2022
- On January 1, 2020, MP's customer issued a 3 year 8% note, PHP 3,000,000 for services billed to be paid at maturity date. What is the carrying amount as at January 1, 2020. The prevailing interest rate is 10%On January 1,2022, Ace Company finished landscaping services and accepted in exchange a 10% $400000 promissory note with a due date of December 31,2024. Interest is receivable at December 31 each year. Notes with similar risks have a market rate of interest of 5%. (A.) Determine the value of the following N, I/Y, PMT, FV. B The present value of the note was $_______. (C) Prepare a schedule of Note Discount/Premium Amortization for Ace Company under the effect interest methodOn January 1,2022, Ace Company finished landscaping services and accepted in exchange a 10% $400000 promissory note with a due date of December 31,2024. Interest is receivable at December 31 each year. Notes with similar risks have a market rate of interest of 5%. (A.) Determine the value of the following N, I/Y, PMT, FV. B The present value of the note was $_______. (C) Prepare a schedule of Note Discount/Premium Amortization for Ace Company under the effect interest method (D) Prepare the journal entries on the following dates: Jan 1, 2022 and Dec 31, 2023
