On Jan. first, 2018, Snuff Company accepts 60000 non-interest bearing note from a customer for the...

On Jan. first, 2018, Snuff Company accepts 60000 non-interest bearing note from a customer for the sale of goods. The note is to be paid in 3 equal installments every Dec. 31st (first payment on Dec. 31, 2018). An assumed interest rate of 10% is implied. Round installment payments to the nearest dollar.

pt 1: Determine the PV of the note. Show all computations or calculator imputs.

pt 2: Prepare an amortization table in Excell to show the revenue recognized each year

pt 3: Prepare the journal entries for the dates listed below.

jan 1, 2018

Dec 31,2018

Dec 31, 2019

Expert Solution


	Annual installment	20000
	PV factor for annuity n= 3 i = 10%	2.48685
	Present value of notes payable	49737

		Annual installment	Interest revenue	Amortized value	Carrying value
					49737
	Year 1	20000	4974	15026	34711
	Year 2	20000	3471	16529	18182
	Year 3	20000	1818	18182	0

01-Jan-18	Notes receivable	49737
	Discount on notes	10263
	Sales revenue		60000

31-Dec-18	Cash	20000
	Interest revenue		4974
	Notes receivable		15026

31-Dec-18	Cash	20000
	Interest revenue		3471
	Notes receivable		16529

ekkarill92 answered 2 years ago

On January 1, 2018 Kimmel Company accepts a $53000 non interest bearing note from a customer...

On January 1, 2018 Kimmel Company accepts a $53000 non interest bearing note from a customer for services provided. The note is to be paid in 4 equal installments every 6 months (payments every July 1 and January 1 with the first payment on July 1, 2018) An assumed interest rate of 9% is implied. Round installments to the nearest dollar. A) Prepare an amortization table for this note. Round amounts to the nearest dollar. Clearly label your rows with...

How is Interest-Bearing Note different from Non-Interest Bearing Note? How are the journal entries different for...

How is Interest-Bearing Note different from Non-Interest Bearing Note? How are the journal entries different for each of them? Provide examples of each joirnal entry.

Crane Company receives a $64,000, 7-year note bearing interest of 12% (paid annually) from a customer...

Crane Company receives a $64,000, 7-year note bearing interest of 12% (paid annually) from a customer at a time when the discount rate is 8%.

Oriole Company receives a $78,000, 10-year note bearing interest of 9% (paid annually) from a customer...

Oriole Company receives a $78,000, 10-year note bearing interest of 9% (paid annually) from a customer at a time when the discount rate is 11%. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) What is the present value of the note received by Oriole? (Round answer to 2 decimal places, e.g. 25.25.) Present value of note received = ??

3. Non-interest bearing note On June 30, 2016, the Esquire Company sold some merchandise to a...

3. Non-interest bearing note On June 30, 2016, the Esquire Company sold some merchandise to a customer for $30,000 and agreed to accept as payment a noninterest-bearing note with an 8% discount rate requiring the payment of $30,000 on March 31, 2017. The 8% rate is appropriate in this situation. Required: Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods sold), the December 31, 2016 interest accrual,...

Selkirk Company obtained a $30,000 note receivable from a customer on January 1, 2018. The note,...

Selkirk Company obtained a $30,000 note receivable from a customer on January 1, 2018. The note, along with interest at 12%, is due on July 1, 2018. On February 28, 2018, Selkirk discounted the note at Unionville Bank. The bank’s discount rate is 14%. Required: Prepare the journal entries required on February 28, 2018, to accrue interest and to record the discounting for Selkirk. Assume that the discounting is accounted for as a sale. (If no entry is required for...

On October 1, Black Company receives a 10% interest-bearing note from Reese Company to settle a...

On October 1, Black Company receives a 10% interest-bearing note from Reese Company to settle a $22,600 account receivable. The note is due in six months. At December 31, Black should record interest revenue of a.$572 b.$565 c.$575 d.$562 Please answer it asap

#207 Sam Company had an interest-bearing note receivable in the face amount of $7,800. This note...

#207 Sam Company had an interest-bearing note receivable in the face amount of $7,800. This note was created on March 1, Year 1, as the result of a $7,800 sales transaction by Sam. The note's interest rate and due date were 7% and February 1, Year 2, respectively. The principal and all of the interest are to be collected in full on the note's due date. On September 1, Year 1, Sam found itself in need of cash and opted...

Canterbury Co. issues a discounted, non-interest-bearing note in exchange for borrowed funds. Choose whether the cash...

Canterbury Co. issues a discounted, non-interest-bearing note in exchange for borrowed funds. Choose whether the cash received will be higher or lower than the face value of the note, and whether the effective annual interest rate will be higher or lower than the discount rate: Cash Received vs. Face Value of Note Effective Rate vs. Discount Rate a. Higher Lower b. Lower Higher c. Lower Lower d. Higher Higher

On 1/1/20 Toyota sells a car for a non-interest bearing note. The car would normally sell...

On 1/1/20 Toyota sells a car for a non-interest bearing note. The car would normally sell for $75,000 in cash, but the customer instead opts to pay a lump sum of $100,000 in two years (this is the only payment). The car costs Toyota $55,000 to build. Assume that Toyota uses a perpetual inventory system and sells directly to the customer. 1. Record the two journal entries that Toyota should record for the sale (the second journal entry being for...

Question