On January 1, 20x1, Drive Co. paid cash of P200,000 and issued a noninterest-bearing note P2,000,000 in

Fantastic news! We've Found the answer you've been seeking!

Question:

On January 1, 20x1, Drive Co. paid cash of P200,000 and issued a noninterest-bearing note P2,000,000 in exchange for vehicle. The note is due in four equal annual installments. The first installment is due on January 1, 20x1 and the succeeding installments are due every 1st of January. The prevailing rate of interest for this type of not is 12%.

Requirements:

a. Prepare the journal entries.

b. How much is the interest expense in 20x2?

c. How much is the carrying amount of the note on December 31, 20x1?

Posted Date: Sep 13, 2021 01:50 AM

See More Questions

On January 1 20X1 Alpha Inc purchased 400000 95 bonds of Theta Limited The bonds pay interest annually every December 31 and would mature on December 31 20x5 The bonds were acquired to yield 1025...
Write out the equilibrium constant expressions for the following reaction: N2 (g) + O2 (g) 2 NO (g)
The financial statements for Metzger Inc. and Ortiz Corp., just prior to their combination, for the year ending December 31, 2012, follow. Ortiz's buildings were undervalued on its financial records...
Besides warehouse layout decisions, what are some other applications where ranking items according to bang/buck might make sense?
I said that the probability of alcohol involvement, given an accident at night, was approximately .50, but I dont know the probability of an accident, given that you had been drinking. How would you...
From the left panel of Figure 4.4, derive Nation 2s supply curve of exports of commodity Y. From the left panel of Figure 4.3, derive Nation 1s demand curve for Nation 2s exports of commodity Y. Use...
We will use the Minitab macro NormGCP to nd the posterior distribution of the normal mean when we have a random samples of size n of normal(, 2 ) observations with known 2 = 2 2 , and we have a...
This problem continues the Daniels Consulting situation. Daniels Consulting performs systems consulting. Daniels has also begun selling accounting software and uses the perpetual inventory system to...
6. If the tangent to the curve y = x at the point P(t, t) meets the curve again at Q, then the ordinate of the point which divides PQ internally in the ratio 1:2 is: (a) 0 7. (b)-t The system of...
Suppose your company introduces a referral incentive for existing customers. Namely, cus- tomers can get a $500 discount on their customer service subscription for each customer lead that they refer...
Project 3 - Data Mining for Intrusion Detection Recently there has been much interest in applying data mining to computer network intrusion detection. An intrusion can be defined as "any set of...
Most people who buy a luxury car believe that Lexus is a quality and reliable brand. According to the BrandAsset Valuator, this refers to which dimension of brand equity? Discuss briefly
and I would like to use a constant value in the instruction: rl,r2,# I need to place one of the following constants in the blank space. For each suggested value below, tell me if this is a valid or...
What is the labor productivity if 3 workers who worked for half an hour daily for 6 days are able to install 200 meters of carpet? 2. Having a defect of 1200pcs from the 10,000 pcs submitted to...
You are creating a program that allows student to enter a Boolean expression and you will display the truth table with multiple variables and result. Here are some steps for this program: 1....
BGJ Corporation had no short-term investments prior to this year. It had the following transactions this year involving short-term stock investments with insignificant influence. April 16 July 7 July...
What is an S Corporation? ANSWER Unselected A corporation whose stock is widely held and available for sale to the general public Unselected A corporation whose stock is held by only a few people and...
The swap spread is the difference between the swap rate and the equivalent-maturity Treasury bond yield. Explain why a widening swap spread may be a signal of deteriorating economic conditions. Plot...
Presented below is information for Bach Chocolatiers for the month of March 2025. Instructions a. Prepare an income statement. b. Prepare a comprehensive income statement. c. Compute the gross profit...
In 2025, Endeaver Cameras had net sales of 860,000 and cost of goods sold of 533,200. Operating expenses were 221,000, and interest expense was 7,000. Instructions a. Compute Endeavers gross profit....
The trial balance columns of the worksheet for Barbosa Apparel at June 30, 2025, are as follows. Other data: Operating expenses incurred on account, but not yet recorded, total R$1,640. Instructions...

On January 1, 20x1, Drive Co. paid cash of P200,000 and issued a noninterest-bearing note P2,000,000 in

Question:

Expert Answer:

Date Amount Paid P Interest Expense P Principle Amount P Car... View the full answer

Students also viewed these accounting questions