Omega Chemicals Ltd . took a $ 5 6 0 , 0 0 0 two - year
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Question:
Omega Chemicals Ltd took a $ twoyear note receivable from a customer in connection with a major sale transaction on May X The note required annual April interest payments of and the principal was due on April X Omega has a December yearend.
PV of $ PVA of $ and PVAD of $Use appropriate factors from the tables provided.
Required:
Prepare journal entries to record the initial sale transaction and each payment on the books of Omega, assuming that the market interest rate is Do not round intermediate calculations. If no entry is required for a transactionevent select No journal entry required" in the first account field. Round time value factor to decimal places and final answers to the nearest whole dollar amount.
Assume now that the market interest rate is Calculate the present value of the note, and prepare a schedule that shows the interest for each year of the note receivable. Round time value factor to decimal places and intermediate calculations and final answers to the nearest whole dollar amount. Enter all answers in positive.
Prepare journal entries to record the initial sale transaction and each payment on the books of Omega, consistent with requirement Use the gross method to record the note. If no entry is required for a transactionevent select No journal entry required" in the first account field. Round time value factor to decimal places and final answers to the nearest whole dollar amount.
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Related Book For
Intermediate Accounting
ISBN: 978-0071339476
Volume 1, 6th Edition
Authors: Beechy Thomas, Conrod Joan, Farrell Elizabeth, McLeod Dick I
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