WHY NO ONE IS ANSWERING THOSE QUESTIONS? Can Someone PLEASE help and let me know
ID: 2562001 • Letter: W
Question
WHY NO ONE IS ANSWERING THOSE QUESTIONS? Can Someone PLEASE help and let me know ASAP. Thanks I Lena) Amber Mining and Milling, Inc., contracted with Truax Corporation to have constructed a custom-made lathe. The machine was completed and ready for use on January 1, 2016. Amber paid for the lathe by issuing a $600,000, three-year note that specified 4% interest, payable annually on December 31 of each year. The cash market price of the lathe was unknown. It was determined by comparison with similar transactions that 12% was a reasonable rate of interest 1-b. Prepare the journal entry on January 1, 2016, for Truax Corporation’s sale of the lathe 2. Prepare an amortization schedule for the three-year term of the note. 3. Prepare the journal entries to record (a) interest for each of the three years and (b) payment of the note at maturity for Truax. II Lena) Federal Semiconductors issued 11% bonds, dated January 1, with a face amount of $800 million on January 1, 2016. The bonds sold for $739,814,813 and mature on December 31, 2035 (20 years). For bonds of similar risk and maturity the market yield was 12%. Interest is paid semiannually on June 30 and December 31. Federal determines interest at the effective rate. Federal elected the option to report these bonds at their fair value. On December 31, 2016, the fair value of the bonds was $730 million as determined by their market value in the over-the-counter market. Assume the fair value of the bonds on December 31, 2017 had risen to $736 million. Complete the below table to record the following journal entries 1.& 2. Prepare the journal entry to adjust the bonds to their fair value for presentation in the December 31, 2016, balance sheet, and adjust the bonds to their fair value for presentation in the December 31, 2017, balance sheet. Federal determined that one-half of the increase in fair value was due to a decline in general interest rates. III Lena) At January 1, 2016, NCI Industries, Inc., was indebted to First Federal Bank under a $240,000, 10% unsecured note. The note was signed January 1, 2012, and was due December 31, 2017. Annual interest was last paid on December 31, 2014. NCI was experiencing severe financial difficulties and negotiated a restructuring of the terms of the debt agreement. First Federal agreed to reduce last year’s interest and the remaining two years’ interest payments to $11,555 each and delay all payments until December 31, 2017, the maturity date. Prepare the journal entries by NCI Industries, Inc., necessitated by the restructuring of the debt at: (1) January 1, 2016; (2) December 31, 2016; and (3) December 31, 2017 URGENT PLEASE
Explanation / Answer
1-b) Purchase of lathe machine
Lathe Machine - Debit $600,000
To Notes Payable - Credit $600,000
(to record of payment for Purchase of lathe machine to Truax corporation via 3 year note)
2) Amortization schedule for the three-year term of the note
Year 1
Year 2
Year 3
Total
Interest 4%
$20,504.13
$12,678.96
$4,534.98
$37,718.07
Principal Paid
$1,92,068.56
$1,99,893.73
$2,08,037.71
$6,00,000.00
Yearly Payment
$2,12,572.69
$2,12,572.69
$2,12,572.69
$6,37,718.07
Opening
$4,07,931.44
$2,08,037.71
0.00
0.00
3a) Instalment Notes – Year 1 Interest Journal
Interest Expense - Debit $20,504.13
To Cash - Credit $20,504.13
(to record the 1st year interest and instalment on note payable)
Instalment Notes – Year 2 Interest Journal
Interest Expense - Debit $12,678.96
To Cash - Credit $12,678.96
(to record the 2nd year interest and instalment on note payable)
Instalment Notes – Year 3 Interest Journal
Interest Expense - Debit $4,534.98
To Cash - Credit $4,534.98
(to record the 3rd year interest and instalment on note payable)
3b) Payment of the note payable at maturity for Truax Corporation
Notes Payable - Debit $600,000
To Cash - Credit $600,00
(to record of note payable to Truax corporation on maturity)
Year 1
Year 2
Year 3
Total
Interest 4%
$20,504.13
$12,678.96
$4,534.98
$37,718.07
Principal Paid
$1,92,068.56
$1,99,893.73
$2,08,037.71
$6,00,000.00
Yearly Payment
$2,12,572.69
$2,12,572.69
$2,12,572.69
$6,37,718.07
Opening
$4,07,931.44
$2,08,037.71
0.00
0.00
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.