On September 1, 2017, Wildhorse Ltd. purchased equipment for $31,900 by signing a two-year note payable...

On September 1, 2017, Wildhorse Ltd. purchased equipment for $31,900 by signing a two-year note payable with a face value of $31,900 due on September 1, 2019. The going rate of interest for this level of risk was 6%. The company has a December 31 year end.

REQUIRED:

1. Calculate the cost of the equipment assuming the note is as follows. (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places,e e.g. 5,275.)

a.		An 6% interest-bearing note, with interest due each September 1.
b.		A 2% interest-bearing note, with interest due each September 1.
c.		A non–interest-bearing note.

2. Record all journal entries from September 1, 2017, to September 1, 2019, for an 6% interest-bearing note, with interest due each September 1st. Ignore depreciation of the equipment.

3. Record all journal entries from September 1, 2017, to September 1, 2019, for a 2% interest-bearing note, with interest due each September 1st. Ignore depreciation of the equipment.

4. Record all journal entries from September 1, 2017, to September 1, 2019, for a non–interest-bearing note. Ignore depreciation of the equipment.

Solutions

Expert Solution

ekkarill92 answered 9 months ago

Next > < Previous

Related Solutions

Wildhorse Ltd. purchased a new machine on April 4, 2017, at a cost of $180,000. The...

Wildhorse Ltd. purchased a new machine on April 4, 2017, at a cost of $180,000. The company estimated that the machine would have a residual value of $18,000. The machine is expected to be used for 12,960 working hours during its four-year life. Actual machine usage was 1,300 hours in 2017; 1,900 hours in 2018; 2,500 hours in 2019; 1,900 hours in 2020; and 2,100 hours in 2021. Wildhorse has a December 31 year end. (a) Calculate depreciation for the...

Sunland Well Services Ltd. purchased equipment for $904,000 on September 30, 2021. The equipment was purchased...

Sunland Well Services Ltd. purchased equipment for $904,000 on September 30, 2021. The equipment was purchased with a $139,000 cash down payment and through the issue of a $765,000, 5-year, 3.6% mortgage note payable for the balance. The terms provide for the mortgage to be repaid in monthly blended payments of $13,951 starting on October 31.Record the first two instalment payments on October 31 and November 30.

On January 1, 2017, Eagle borrows $25,000 cash by signing a four-year, 7% installment note. The...

On January 1, 2017, Eagle borrows $25,000 cash by signing a four-year, 7% installment note. The note requires four equal payments of $7,381, consisting of accrued interest and principal on December 31 of each year from 2017 through 2020. (Round your intermediate calculations and final answers to the nearest dollar amount.) Prepare the journal entries for Eagle to record the loan on January 1, 2017, and the four payments from December 31, 2017, through December 31, 2020. Eagle borrows $25,000...

On January 1, 2017, Eagle borrows $16,000 cash by signing a four-year, 5% installment note. The...

On January 1, 2017, Eagle borrows $16,000 cash by signing a four-year, 5% installment note. The note requires four equal payments of $4,512, consisting of accrued interest and principal on December 31 of each year from 2017 through 2020. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided. Round your intermediate calculations and final answers to the nearest dollar amount. Round all table values to 4 decimal places, and use the rounded table...

On January 1, 2017, Eagle borrows $27,000 cash by signing a four-year, 9% installment note. The...

On January 1, 2017, Eagle borrows $27,000 cash by signing a four-year, 9% installment note. The note requires four equal payments of $8,334, consisting of accrued interest and principal on December 31 of each year from 2017 through 2020. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided. Round your intermediate calculations and final answers to the nearest dollar amount. Round all table values to 4 decimal places, and use the rounded table...

a. Borrowed $870,000 from the bank on December 1, signing a note payable, due in six...

a. Borrowed $870,000 from the bank on December 1, signing a note payable, due in six months. b. Purchased a new snowplow for $27,000 cash on December 31. c. Purchased ski supplies for $18,200 on account. d. Incurred $29,100 in routine maintenance expenses for the chairlifts; paid cash. e. Received $73,750 for season passes (beginning in the new year). f. Daily lift passes were sold this month for a total of $82,200 cash. g. Received a $675 deposit on a...

Young Concrete Ltd purchased equipment on 1 January 2017 for $132,000. The expected life of the...

Young Concrete Ltd purchased equipment on 1 January 2017 for $132,000. The expected life of the equipment is 10 years, or 150,000 units of production, and its residual value is $12,000. The equipment produces 8,000 units and 13,000 units in years 2017 and 2018 respectively. Under three depreciation methods, the annual depreciation expense and the balance of accumulated depreciation at the end of 2017 and 2018 are as follows: Method A Method B Method C Year Annual depreciation expense Accumulated...

The following transactions occurred: Purchased equipment at a cost of $10,200 on May. 1, signing a...

The following transactions occurred: Purchased equipment at a cost of $10,200 on May. 1, signing a nine month 6.6% note payable for that amount. Recorded a week’s sales of $36,000 on Feb. 14, two thirds on credit and one-third for cash. Sales are subject to 6 ½% sales tax. Accrued monthly warranty expense, which is estimated at 1.2% on sales in #2. Sent last week’s sales tax to the state, Feb. 19. Sold 2 year service contracts on copiers for...

On April 1, 2017 FIRE retired its note payable and on July 1, 2017 the company...

On April 1, 2017 FIRE retired its note payable and on July 1, 2017 the company issued a bond. Bond information Face value $90000 Coupon rate 6.0% Term 9 years Net proceeds $98,000 Interest will be paid semi-annually on December 31 and June 30. At the investor's option, each $2,000 bond is convertible into 50 common shares of the company. Your investigation into similar bond issues showed that had the company issued the debt without the conversion option, the market...

XYZ company bought equipment for $20,000 by signing a 4-year note with ABC savings bank. XYZ’s...

XYZ company bought equipment for $20,000 by signing a 4-year note with ABC savings bank. XYZ’s borrowing rate was 4% and the monthly payments are $469.70. The lending officer at the bank prepared the following amortization schedule: Payment # Payment Interest principal balance 1 469.70 100 369.70 19,630.30 2 469.70 98.15 371.55 19,258.75 3 469.70 96.29 373.41 18,885.34 ____________________________ 46 469.70 6.98 462.72 932.40 47 469.70 4.66 465.04 467.36 48 469.70 2.34 467.36 0.00 Required: Show the journal entry that...

Subjects