Cash Accounts Receivable Note Receivable Building (net) Construction Equipment (net) Idle Equipment (net) Broadcast License (net)...

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Cash Accounts Receivable Note Receivable Building (net) Construction Equipment (net) Idle Equipment (net) Broadcast License (net) Total Assets Beautiful, Inc. Balance Sheet December 31, 2021 $ $ $ $ Accounts Payable $ Line of credit for construction $ Note Payable $ Total Liabilities Paid In Capital Retained Earnings $ $ 425,621 1,654,887 900,000 1,800,000 600,000 637,000 107,000 1,423,000 7,547,508 1,067,450 300,000 651,185 2,018,635 4,000,000 1,528,873 7,547,508 The current interest rate for Beautiful is 7%. Not long term so no adjustment Received on 2/1/2021 In return for a large service contract Terms= no Interest - 3 payments of 300,000 each Feb- need to calculate the present value Being used for normal operations so no adjustment Weighted Average expenditures 375000 to add in capitalized interest - started and completed in 20 No change in use Used equipment dealer quoted $82,000- original cost $450,000-change in use so consider impairme 10 year remaining life but changes to the broadcast spectrum - so need to consider impairment Company saves on royalties for using the broadcast spectrum on contract Without the broadcast license the royalties would be 126,000 per year (this is the future cash flows) Interest rate is 7% (rate for capitalized interest) Borrowed 800,000 on January 1, 2018 with monthly payments for 15 years at 6% Need to calculate the payment and then the present value of future cash flows using new interest rate Required: 1. Show all journal entries needed to adjust to fair value where necessary. 2. Show the new balance sheet with fair value as indicated. 3. Show the journal entry to record the trade in of the idle equipment for new equipment (sticker price $105,000) plus payment of $10,000 to the equipment dealer. So you gave up the old equipment and cash for new equipment on March 1, 202 Cash Accounts Receivable Note Receivable Building (net) Construction Equipment (net) Idle Equipment (net) Broadcast License (net) Total Assets Beautiful, Inc. Balance Sheet December 31, 2021 $ $ $ $ Accounts Payable $ Line of credit for construction $ Note Payable $ Total Liabilities Paid In Capital Retained Earnings $ $ 425,621 1,654,887 900,000 1,800,000 600,000 637,000 107,000 1,423,000 7,547,508 1,067,450 300,000 651,185 2,018,635 4,000,000 1,528,873 7,547,508 The current interest rate for Beautiful is 7%. Not long term so no adjustment Received on 2/1/2021 In return for a large service contract Terms= no Interest - 3 payments of 300,000 each Feb- need to calculate the present value Being used for normal operations so no adjustment Weighted Average expenditures 375000 to add in capitalized interest - started and completed in 20 No change in use Used equipment dealer quoted $82,000- original cost $450,000-change in use so consider impairme 10 year remaining life but changes to the broadcast spectrum - so need to consider impairment Company saves on royalties for using the broadcast spectrum on contract Without the broadcast license the royalties would be 126,000 per year (this is the future cash flows) Interest rate is 7% (rate for capitalized interest) Borrowed 800,000 on January 1, 2018 with monthly payments for 15 years at 6% Need to calculate the payment and then the present value of future cash flows using new interest rate Required: 1. Show all journal entries needed to adjust to fair value where necessary. 2. Show the new balance sheet with fair value as indicated. 3. Show the journal entry to record the trade in of the idle equipment for new equipment (sticker price $105,000) plus payment of $10,000 to the equipment dealer. So you gave up the old equipment and cash for new equipment on March 1, 202

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