2) Boucher Ltd. (Boucher) sold equipment to Flynn Corporation (Flynn) for $450,000 on January 1, 2021....
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
2) Boucher Ltd. (Boucher) sold equipment to Flynn Corporation (Flynn) for $450,000 on January 1, 2021. Flynn paid cash of $75,000 and signed a 7%, $375,000 note payable for the balance. The note payable is due in three equal instalments on December 31, 2021, 2022 and 2023. Each payment includes both principal and interest on the unpaid balance. Required (34 marks): (show all your calculations) a) Prepare the journal entry that Boucher would record on January 1, 2021 when this note is signed. b) Prepare the journal entry that Flynn would record on January 1, 2021 when this note is signed. c) What is the amount of the equal annual payment that Flynn must make each year? Show how you calculated this amount. d) What is the total amount of interest on the note over the period of the three years? Show how you calculated this amount. e) Complete the following table: Debt Payment Schedule Cash Interest Unpaid Date Payment Expense Decrease in Principal Principal Jan.1/20 Dec.31/20 Dec.31/21 Dec.31/22 Total f) Prepare the journal entry for each of the three payments that Flynn will record. g) Is interest expense increasing or decreasing over time? Why? 1 2) Boucher Ltd. (Boucher) sold equipment to Flynn Corporation (Flynn) for $450,000 on January 1, 2021. Flynn paid cash of $75,000 and signed a 7%, $375,000 note payable for the balance. The note payable is due in three equal instalments on December 31, 2021, 2022 and 2023. Each payment includes both principal and interest on the unpaid balance. Required (34 marks): (show all your calculations) a) Prepare the journal entry that Boucher would record on January 1, 2021 when this note is signed. b) Prepare the journal entry that Flynn would record on January 1, 2021 when this note is signed. c) What is the amount of the equal annual payment that Flynn must make each year? Show how you calculated this amount. d) What is the total amount of interest on the note over the period of the three years? Show how you calculated this amount. e) Complete the following table: Debt Payment Schedule Cash Interest Unpaid Date Payment Expense Decrease in Principal Principal Jan.1/20 Dec.31/20 Dec.31/21 Dec.31/22 Total f) Prepare the journal entry for each of the three payments that Flynn will record. g) Is interest expense increasing or decreasing over time? Why? 1
Expert Answer:
Answer rating: 100% (QA)
Solutiona Journal entry in the book of boucher on j... View the full answer
Related Book For
Advanced Financial Accounting
ISBN: 978-0078025624
10th edition
Authors: Theodore E. Christensen, David M. Cottrell, Richard E. Baker
Posted Date:
Students also viewed these accounting questions
-
Prepare the closing journal entry that Reitmans would make on January 28, 2012. (Alternative approach: Set up an accounting equation spreadsheet using Reitmans' financial statements and record the...
-
Prepare the journal entry that each company should make to record the exchange under each of the following independent assumptions:1. The information available indicates that the exchange has...
-
MY NOTES ASK YOUR TEACHER (a) A small Styrofoam bead with a charge of -60.0 nC is at the center of an insulating plastic spherical shell with an inner radius of 20.0 cm and an outer radius of 34.0...
-
Help on this. thanks 2022SP CS234 Computer Science II 1. (Based on P6.11) A supermarket wants to reward its best customer of each day, showing the customer's name on a screen in the supermarket. For...
-
The figure shows a welded steel bracket loaded by a static force F. Estimate the factor of safety if the allowable shear stress in the weld throat is 18kpsi. in in 45 in
-
Mikkeli Oy has three operating divisions. The managers of these divisions are evaluated on their divisional operating profit, a figure that includes an allocation of corporate overhead proportional...
-
Using the information in the below table, prepare a classified balance sheet for Arrow Company as of December 31, 2014 and December 31, 2015, along with multi-step income statements for the years...
-
The following auditors report was drafted by a staff accountant of Turner & Turner, CPAs, at the completion of the audit of the financial statements of Lyon Computers, Inc. (a non-public company) for...
-
6. Stocks that don't pay dividends yet Goodwin Technologies, a relatively young company, has been wildly successful but has yet to pay a dividend. An analyst forecasts that Goodwin is likely to pay...
-
The financial statements for Harridges Ltd are given below for the two years ended 30 June 2009 and 2010. Harridges Limited operates a department store in the centre of a small town. Dividends were...
-
Assume your money is invested in U.S Treasury notes yielding 4%. You are considering investing a portion of the money in a stock that has a beta of 1.25 and your best estimate of the stock's likely...
-
2. Write a program in python to get the number from the user using GUI. Use 2 command buttons one to check whether the number is an amstrong number If the given number is a amstrong, display it is a...
-
In the context of brand management, can you explain the concept of brand equity and its significance for a company?
-
1.There are many examples of successful companies. To what extent is 3M justifiably highlighted as the innovating machine? 2. Outline the results of 3M (2 to 3 results). Identify opportunities for...
-
Perform an economic analysis studying impacts of Covid-19 on health or health care. For the research bibliography, we need to provide ten (or more) complete research citations. Majority of citations...
-
An ASTM A572 Grade 50 steel bar is attached to a rigid wall at one end and a spring at the other end, with the other end of the spring being attached to a rigid wall, as shown below. The bar is 20 cm...
-
Law, Cheeseman. Pearson Publ., Edition 11 file:///C:/Users/a.shivy3/Downloads/9780136828075-business-law-11th-edition-original-pdf-ebook-1670175929.pdf Project 3.1's purpose is to help you understand...
-
What is the purpose of the journal wizard?
-
Pine Corporation acquired 70 percent of Bock Companys voting common shares on January 1, 20X2, for $108,500. At that date, the noncontrolling interest had a fair value of $46,500 and Bock reported...
-
On January 1, 20X1, partners Art, Bru, and Chou, who share profits and losses in the ratio of 5:3:2, respectively, decide to liquidate their partnership. The partnership trial balance at this date...
-
Dewey Corporation owns 30 percent of the common stock of Jimm Company, which it purchased at underlying book value on January 1, 20X5. Dewey reported a balance of $245,000 for its investment in Jimm...
-
The following balance sheet and income statement data were taken from the financial records of The Dana Point Company: \ Required Prepare percentage change and common-sized balance sheets and income...
-
The following balance sheet and income statement data were taken from the financial records of The Dana Point Company: Required 1. Calculate the following ratios for The Dana Point Company for 2015...
-
The Artic Company's income statement and comparative balance sheets at December 31 of 2019 and 2018 are shown below: Cash dividends of \(\$ 40,000\) were declared and paid during 2019. Plant assets...
Study smarter with the SolutionInn App