Waterway Limited owes $200,000 to Teal Mountain Inc. on a 10-year, 10% note due on December...
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Waterway Limited owes $200,000 to Teal Mountain Inc. on a 10-year, 10% note due on December 31, 2020. The note was issued at par. Because Waterway is in financial trouble, Teal Mountain Inc. agrees to extend the maturity date to December 31, 2022, reduce the principal to $150,000, and reduce the interest rate to 3%, payable annually on December 31. The market rate is currently 3%. Waterway prepares financial statements in accordance with IFRS. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1. Date Account Titles and Explanation Debit Credit Dec. 31, 2020 Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2022 Waterway Limited owes $200,000 to Teal Mountain Inc. on a 10-year, 10% note due on December 31, 2020. The note was issued at par. Because Waterway is in financial trouble, Teal Mountain Inc. agrees to extend the maturity date to December 31, 2022, reduce the principal to $150,000, and reduce the interest rate to 3%, payable annually on December 31. The market rate is currently 3%. Waterway prepares financial statements in accordance with IFRS. Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1. Date Account Titles and Explanation Debit Credit Dec. 31, 2020 Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2022
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Horngrens Financial and Managerial Accounting
ISBN: 978-0133866292
5th edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura
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