File Edit w History Bookmarks Window Help Chapter 14 Pre-Built Problems 12 Braxt

Question

File Edit w History Bookmarks Window Help Chapter 14 Pre-Built Problems 12 Braxton Technologies, Inc, constructed a conveyor for A&G; Warehousers that was completed and ready for use on January t AAG paid fythe crvepr by issuing a $100,000, four-year note that specified 4% interest to be paid on Dec ber 31 of each year, and the note is to be repaid at the end of four years. The conveyor was comparison with similar transactions it was determined that a reasonable interest rate was custom-built for A&G;, so its cash price was unknown. By 10 10% (Eyott Pyott EVA of St PVAof S1, EVAD of $1 and PVAD ot $0 (Use appropriate factorts) from the tables provided.) eook L Prepare the journal entry for A&G;'s purchase of the conveyor on January 1, 2018 2. Prepare an amortization schedule for the four-year term of the note. 3. Prepare the journal entry for A&G;'s third interest payment on December 31, 2020. 4. H ASG's note had been an installment note to be paid in four equal payments at the end of each year beginning December 31, 2018, what would be the amount of each installment? 5. By considering the installment payment of required 4 Prepare an amortization schedule for the four-year term of the installment 6 Prepare the journal entry for A&G;'s third instalment payment on December 31, 2020. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required S Required 6 Prepare the journal entry for AGs purchase of the conveyor on January i, 2018. (If no entry is required for a t, select "No journal entry required" in the first account field. Enter your answers in whole dollars.) Journal entry worksheet K Prev 12 of 13 Next FS b-11

Explanation / Answer

A) January 01 2018 Conveyor AC Dr 1,00,000 To Bank Account Cr 1,00,000 Note Reasonable interest rate taken as the interest rate Years Cash Payment Effective Interest Out standing Balance B) 2018 10,000.00 10,000.00 1,00,000.00 2019 10,000.00 10,000.00 1,00,000.00 2020 10,000.00 10,000.00 1,00,000.00 2021 10,000.00 10,000.00 1,00,000.00 Since the interest is paid at the end of four years the interest will be calculated for all 4 years The outstanding balance is 100,000 C) On December 2020 Journal Entry for interest Payment Interest Account Dr 10000 To Bank Ac Cr 10000 Profit and loss Ac Dr 10000 To Interest Account Cr 10000 D) If Installment to be paid on equal instalments Year Opening Balance Interest Payment Closing Balance 2018 1,00,000.00 10,000.00 31,546.74 78,453.26 2019 78,453.26 7,845.33 31,546.74 54,751.85 2020 54,751.85 5,475.18 31,546.74 28,680.29 2021 28,680.29 2,868.03 31,546.74 1.58 Equated Instalment can be calculated by using formula P=(r*a)/1-(1+r)-n r = t=rate of interest 10% a Amount 10000 n Number of years 4

Related Questions

Navigate

• Browse (All)
• Browse F
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.