Question: On January 1,2020 , a borrower signed a long-term note, face amount, ($ 100,000); time to maturity, three years; stated rate of interest, (8 %).

On January 1,2020 , a borrower signed a long-term note, face amount, $\$ 100,000$; time to maturity, three years; stated rate of interest, $8 \%$. The market rate of interest of $10 \%$ determined the cash received by the borrower. The note will be paid in three equal annual installments of $\$ 38,803$ each December 31 (which is also the end of the accounting period for the borrower).

Required

a. Compute the cash received by the borrower and prepare a debt amortization schedule.

b. Provide the required entries for the borrower for the issuance of the note on January 1, 2020, and the interest payments in 2020, 2021, and 2022.

Step by Step Solution

★★★★★

3.41 Rating (167 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Intermediate Accounting Volume 2 Questions!

Stephanie claims increasing sales will reduce the COGS on a PER UNIT basis. Wilson s EOQ includes some of the logistics costs in COGS [ assume annual demand is 1 , 0 0 0 units per year, ordering cost...

Find the area of the region outside r = 5 + 5 sin 0, but inside 15 sin 0. r =

To purchase a new truck a contractor needs to borrow $48,550. The bank offers a 5-year loan at an interest rate of 4%. The car dealer offers a 6-year loan at an interest rate of 2%. Q1 : If you...

Presuma que un contrato de seguro de salud establece que pagar $350 mensuales al asegurado si se incapacita totalmente Qu trmino describe mejor este contrato? Grupo de opciones de respuesta...

On January 1, 2020, a borrower signed a long-term note, face amount, $40,000; time to maturity, three years; stated rate of interest, 8%. The market rate of interest of 10% determined the cash...

Question 4 Not complete Marked out of 50.00 P Flag question Recording Entries for an installment Note Payable On January 1, 2020, a borrower signed a long-term note, face amount, 540,000; time to...

Recording Entries for an Installment Note Payable On January 1, 2020, a borrower signed a long-term note, face amount, $240,000; time to maturity, three years; stated rate of interest, 8%. The market...

can I get some help with the wrong ones please. Recording Entries for an Installment Note Payable On January 1, 2020, a borrower signed a long-term note, face amount, $240,000; time to maturity,...

Consider the following sequence of statements, which relate to Batmans perception of Superman as a potential threat to humanity and his decision to fight against him. For Superman to be defeated, it...

The Chambers Corporation produces and markets an automotive theft-deterrent product, which it stocks in various warehouses throughout the country. Recently its market research group compiled a...

Which of the following is one of the steps used to apply the revenue recognizing principle? Multiple Choice Allocate the entire transaction price to the performance obligation that is completed first...

What are the three tactics for promoting generalization that take advantage of natural communities of reinforcement?

Use the information for McCormick Ltd. from BE20.8. Assume that at December 31, 2020, McCormick made an adjusting entry to accrue interest expense of $8,296 on the lease. Prepare McCormicks May 1,...

On January 1, 2020, Lavery Corp., which follows ASPE, leased equipment to Flynn Ltd., which follows IFRS 16. Both Lavery and Flynn have calendar year ends. The following information concerns this...

Assume the same information as in P20.9. Instructions Follow the instructions assuming that McKee Electronics follows IFRS 16. Data From P20.9. The following facts pertain to a non-cancellable lease...

Required information Use the following information for the Exercises 12-13 below. (Algo) [The following information applies to the questions displayed below.] Del Gato Clinic's cash account shows an...

On October 1 , 2 0 2 0 , Bramble Company establishes an imprest petty cash fund by issuing a check for $ 1 8 0 to Pat Harmon, the custodian of the petty cash fund. On October 3 1 , 2 0 2 0 , Pat...

The following list of balances was extracted from the books of Unicomer Ltd, on December 31. 2017. The following notes are relevant: i. Inventory at 31 December 2017 was valued at $800000. ii....