Question

In: Accounting

Ulting Ltd. owes Sleazy Finance Co. $150,000 for a 3-year, 10% note, issued at par and...

Ulting Ltd. owes Sleazy Finance Co. $150,000 for a 3-year, 10% note, issued at par and due on December 31, 2021. Interest was paid annually each December 31. Ulting Ltd. is now in financial difficulties, so Sleazy Finance Co. agrees to extend the note’s maturity date to December 31, 2023, reduce the principal to $130,000, and reduce the interest rate to 9%. The market rate is currently 5%. Both companies follow IFRS. Required:

Prepare all related journal entries for Ulting Ltd. for 2021, 2022, and 2023                    

Solutions

Expert Solution


Related Solutions

Ahmed Co. owes SAR 433,000 to Merando Inc. The debt is a 10-year, 11% note. Because...
Ahmed Co. owes SAR 433,000 to Merando Inc. The debt is a 10-year, 11% note. Because Ahmed Co. is in financial trouble, Merando Inc. agrees to accept some property and cancel the entire debt. The property has a book value of SAR 150,000 and a fair value of SAR 230,000. Prepare the journal entry on Ahmed 's books for debt settlement. * no hand writing or pics * course name is Financial accounting * be sure of answers
In February 2019 a corporation issued a 10,000,000, 10 year, 3% installment note to purchase a...
In February 2019 a corporation issued a 10,000,000, 10 year, 3% installment note to purchase a building. ( Ricky's Store August 2019). The note had payments of $2,500,000 due on February 20 of each year for the next 15 years. 1) Prepare the adjusting journal entry to accrue interest on November 20, 2019. 2) Show the correct account(s) and correct amount(s) and where it will appear on a multiple-step income statement for the year ending November 20, 2019. 3) Show...
In February 2019 a corporation issued a 10,000,000, 10 year, 3% installment note to purchase a...
In February 2019 a corporation issued a 10,000,000, 10 year, 3% installment note to purchase a building. ( Ricky's Store August 2019). The note had payments of $2,500,000 due on February 20 of each year for the next 15 years. 1) Prepare the adjusting journal entry to accrue interest on November 20, 2019. 2) Show the correct account(s) and correct amount(s) and where it will appear on a multiple-step income statement for the year ending November 20, 2019. 3) Show...
NA Co. issued note receivable in January, 2017. The terms of the note are a two-year,...
NA Co. issued note receivable in January, 2017. The terms of the note are a two-year, $100,000, 10% interest rate. Assuming the market interest rate is 8% per annum and NA Co. use the effective interest method for an amortization, how much would NA Co. amortize discount (or premium) on the note receivable on the end of 2017? (The present value of $1 for one and two period at 8% is 0.92593 and 0.85734. The present value of $1 for...
On January 2, 2016, Revolution Co. issued 150,000 new shares of its $1 par value common...
On January 2, 2016, Revolution Co. issued 150,000 new shares of its $1 par value common stock valued at $16 a share for all of Founders, Inc.’s outstanding common shares. The fair value and book value of Founders’ identifiable assets and liabilities were the same. Summarized balance sheet information for both companies just before the acquisition on January 2, 2016, is as follows: Revolution Founders Cash $ 250,000 $ 180,000 Inventories $         320,000.00 $         600,000.00 Other Current Assets $         600,000.00...
On January 2, 2016, Revolution Co. issued 150,000 new shares of its $1 par value common...
On January 2, 2016, Revolution Co. issued 150,000 new shares of its $1 par value common stock valued at $16 a share for all of Founders, Inc.’s outstanding common shares. The fair value and book value of Founders’ identifiable assets and liabilities were the same. Summarized balance sheet information for both companies just before the acquisition on January 2, 2016, is as follows: Revolution Founders Cash $ 250,000 $ 180,000 Inventories 320,000 600,000 Other Current Assets 600,000 400,000 Land 350,000...
Skysong Corp. owes $280,000 to Concord Trust. The debt is a 10-year, 12% note due December...
Skysong Corp. owes $280,000 to Concord Trust. The debt is a 10-year, 12% note due December 31, 2020. Because Skysong Corp. is in financial trouble, Concord Trust agrees to extend the maturity date to December 31, 2022, reduce the principal to $225,000, and reduce the interest rate to 6%, payable annually on December 31. (b)Prepare the journal entries on Concord Trust’s books on December 31, 2020, 2021, 2022.
Swifty Corp. owes $269,000 to Nash Trust. The debt is a 10-year, 12% note due December...
Swifty Corp. owes $269,000 to Nash Trust. The debt is a 10-year, 12% note due December 31, 2020. Because Swifty Corp. is in financial trouble, Nash Trust agrees to extend the maturity date to December 31, 2022, reduce the principal to $215,000, and reduce the interest rate to 7%, payable annually on December 31. (a) Prepare the journal entries on Swifty’s books on December 31, 2020, 2021, 2022. (b) Prepare the journal entries on Nash Trust’s books on December 31,...
On January 1, 2019, Rubin Co. issued a 3-year non-interest-bearing note of $250,000 in exchange for...
On January 1, 2019, Rubin Co. issued a 3-year non-interest-bearing note of $250,000 in exchange for a custom-made machine for which there is no obvious market value. The appropriate discount rate is 5%. Prepare the journal entry to purchase this machine. Looking at the transaction above, how much interest expense would be recorded in 2019 by Rubin Co.?
At the beginning of the year, the company issued $500,000 10-year bonds at par. The holder...
At the beginning of the year, the company issued $500,000 10-year bonds at par. The holder of the bonds can convert $10,000 in bonds into cash based on the performance of the company. Specifically, each $10,000 bond can be converted into cash at the rate of 10% of net income. Draft financial statements reveal net income of $250,000.  prepare a report to the board of directors that discusses the recognition, measurement, and presentation of the financial instruments issued.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT