Fleener Company is in the process of refinancing some long-term debt. Its fiscal year ends on December 31, 2016,and its financial statements will be issued on March 15, 2019. Under current IFRS, how would the debt be classified if the refinancing is completed on December 15, 2016? What if instead it is completed on January 15, 2019?
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Fleener Company is in the process of refinancing some long-term debt. Its fiscal year ends on December 31, 2016,
and its financial statements will be issued on March 15, 2019. Under current IFRS, how would the debt be classified if the refinancing is completed on December 15, 2016? What if instead it is completed on January 15, 2019?
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- Coulson Company is refinancing long-term debt. Accessed March 15, 2022. Its fiscal year ends December 31, 2021. The refinancing is scheduled to be completed on December 15, 2021. What if it's finished on January 15, 2022?Canton Cave Company provided the following schedule of liabilities on December 31, 2019: Accounts payable Notes payable-bank Interest payable Mortgage payable-10% Bonds payable *Bank notes payable include two separate notes payable to First Bank > AP3, 000,000, 10% note issued March 1, 2018, payable on demand. Interest is payable every six 6,500,000 8,000,000 150,000 2,000,000 4,000,000 months. > A one-year, P5,000,000, 11% note issued January 2, 2019. On December 31, 2019, Canton Cave negotiated a written agreement with First Bank to replace the note with a 2-year, P5,000,000, 10% note issued January 2, 2020. *The 10% mortgage note was issued October 1, 2016 with a term of 10 years. > Terms of the note give the holder the right to demand immediate payment if the entity fails to make a monthly interest within 10 days of the date the payment is due. On December 31, 2019, Canton Cave is three months behind in paying its required initial payment. The bonds payable are 10-year, 8% bonds,…On December 31, 2019, GMC had a document payable with a value in the $ 100,000 books. GMC has faced economic difficulties that have not allowed to meet the payment of this debt. Suppose that on the date mentioned the The bank agreed to change the terms of the loan as follows: the principal (maturity value) was reduced to $ 80,000, the expiration date was changed to 31 December 2022, and the contractual interest rate was reduced from 15% to 10%. Determine the effect of this restructuring of debt on the Net Income of GMC on 12/31/19. to. GMC is going to report a profit of $ 20,000. b. GMC will report a profit equal to 5% of the principal. c. GMC is going to report a profit of $ 4,000. d. When the terms of the contract are adjusted, the debtor does NOT report earnings.
- Presented below are two different situations related to Mckee Corporation’s debt obligations. Mckee’s next financial reporting date is December 31, 2020. The financial statements are authorized for issuance on March 1, 2021. 1. Mckee has a long-term obligation of $400,000, which is maturing over 4 years in the amount of $100,000 per year. The obligation is dated November 1, 2020, and the first maturity date is November 1, 2021. 2. Mckee has a short-term obligation due February 15, 2021. Its lender agrees to extend the maturity date of this loan to February 15, 2023. The agreement for extension is signed on January 15, 2021. Instructions Indicate how each of these debt obligations is reported on Mckee’s statement of financial position on December 31, 2020.On December 31, 2019, Kale Bank entered into a debt restructuring agreement with Miserable Corp., which was experiencing financial difficulties. A note for P1,000,000 and one year's accrued interest was due on this date from Miserable. The note receivable from Miserable was restructured as follows: reduced the principal obligation to P700,000. forgave the P120,000 of accrued interest for 2019. extended the maturity date to December 31, 2022. reduced the interest rate to 8%. Interest is payable annually on December 31, beginning 2020. How much interest income should Kale Bank report for the year ended December 31, 2020? Group of answer choices Nil P56,000 P64,258 P75,931Rothschild Chair Company, was indebted to First Lincoln Bank under a $20 million, 10% unsecured note. The note was signed January 1, 2011, and was due December 31, 2024. Annual interest was paid on December 31, 2019. At January 1, 2021, Rothschild Chair Company was experiencing severe financial difficulties and negotiated a restructuting of the terms of the debt agreement. REQUIRED: Prepare all journal entries by First Lincoln Bank to record the restructuring and any remaining transactions, for current and future years, relating to the debt under each of the independent circumstances below: 1.-First Linconl Bank agreed to settle the debt in exchange for land having a fair value of $16 million but carried on Rothschild Chair company's book at $13 million 2.-First Lincoln Bank agreed to a) forgive the interest accrued from last year, b) reduce the remaining four interest payments to $1 million each, and c) reduce the principal to $15 million
- Presented below are two different situations related to Mckee Corporation’s debt obligations. Mckee’s next financial reporting date is December 31, 2017. The financial statements are authorized for issuance on March 1,2018.1. Mckee has a long-term obligation of $400,000, which is maturing over 4 years in the amount of $100,000 per year. The obligation is dated November 1, 2017, and the first maturity date is November 1, 2018.2. Mckee has a short-term obligation due February 15, 2018. Its lender agrees to extend the maturity date of this loan to February 15, 2020. The agreement for extension is signed on January 15, 2018.InstructionsIndicate how each of these debt obligations is reported on Mckee’s statement of financial position on December 31, 2017.The controllers of Kingbird, Inc. and Pina Corp. both ask you whether their companies can reclassify short-term obligations as long-term. Here are the facts surrounding both companies’ short-term debt.Kingbird, Inc. On December 31, 2017, Kingbird, Inc. has $1,920,000 of short-term debt in the form of notes payable to Michaels State Bank due February 5, 2018. On January 28, 2018, Kingbird issued 19,200 shares of common stock at $75 per share. Kingbird used the proceeds of $1,440,000 from the stock issuance, along with $624,000 in cash to retire the short-term debt and associated accrued interest on February 5, 2018. Kingbird will issue its December 31, 2017 financial statements on February 25, 2018.Pina Corp. On December 31, 2017, Pina Corp. has $2,880,000 of short-term notes payable to Indiana Bank & Trust. The notes are due on January 31, 2018. Pina retired the notes, along with $192,000 in accrued interest, in full on January 31, 2018. On February 11, 2018, Pina obtained…Consider the following liabilities of Future Brands, Inc., at December 31, 2016, the company’s fiscal year-end. Should they be reported as current liabilities or long-term liabilities? 1. $77 million of 8% notes are due on May 31, 2020. The notes are callable by the company’s bank, beginning March 1, 2017. 2. $102 million of 8% notes are due on May 31, 2021. A debt covenant requires Future to maintain a current ratio (ratio of current assets to current liabilities) of at least 2 to 1. Future is in violation of this requirement but has obtained a waiver from the bank until May 2017, since both companies feel Future will correct the situation during the first half of 2017.
- Noel Bank loaned 9,000,000 to a borrower on January 1, 2017. The terms of the loan were payment in full on January 1, 2022, plus annual interest payment at 12%. The debtor paid interest on January 1, 2018 as scheduled. However, due to financial setbacks, the debtor was unable to pay interest on 2019. BPI accrued interest on Dec. 31, 2018 but did not continue to accrue interest for 2019 due to considered impairment of the loan. On December 31, 2019, BPI projected these cash flows: December 31, 2020 - P 1,500,000 December 31, 2021 - 2,000,000 December 31, 2022 - 3,000,000 December 31, 2023 - 2,500,000 The present value of 1 at 12% is as follows: For 1 period - 0.8929 For 2 periods - 0.7972 For 3 periods - 0.7118 For 4 periods - 0.6355 How much should be recognized as interest income for 2020?Noel Bank loaned 9,000,000 to a borrower on January 1, 2017. The terms of the loan were payment in full on January 1, 2022, plus annual interest payment at 12%. The debtor paid interest on January 1, 2018 as scheduled. However, due to financial setbacks, the debtor was unable to pay interest on 2019. Noel Bank accrued interest on Dec. 31, 2018 but did not continue to accrue interest for 2019 due to considered impairment of the loan. On December 31, 2019, Noel Bank projected these cash flows: December 31, 2020 - P 1,500,000 December 31, 2021 - 2,000,000 December 31, 2022 - 3,000,000 December 31, 2023 - 2,500,000 The present value of 1 at 12% is as follows: For 1 period - 0.8929 For 2 periods - 0.7972 For 3 periods - 0.7118 For 4 periods - 0.6355 How much is the impairment loss to be recognized on December 31, 2019?Tamarisk Company in its first year of operations provides the following information related to one of its available-for-sale debt securities at December 31, 2020. Amoortization cost $52,100 Fair Value 44,200 Expected credit losses 12,850 What is the amount of the credit loss that Tamarisk should report on this available-for-sale security at December 31, 2020? Prepare the journal entry to record the credit loss, if any (and any other adjustment needed), at December 31, 2020. Assume that the fair value of the available-for-sale security is $57,200 at December 31, 2020, instead of $44,200. What is the amount of the credit loss that Tamarisk should report at December 31, 2020? Assume the same information as for part (c). Prepare the journal entry to record the credit loss, if necessary (and any other adjustment needed), at December 31, 2020.