Required: 1. Calculate the amount of interest that Mason should capitalize in 2024 and 2025 using the specific interest method. 2. What is the total cost of the building? 3. Calculate the amount of interest expense that will appear in the 2024 and 2025 income statements.
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- QUESTION 3 (15 marks): On December 31, 2025, Almonte Corporation borrowed $120,000 by signing a 12% note that is to be repaid in 6 annual fixed principal repayments, the first of which is due on December 31, 2026. REQUIRED: (a) Prepare a journal entry to record the initial borrowing of the money. (b) Assume that the payments are to consist of accrued interest plus fixed principal payments. Prepare general journal entries to record the first and second installment payments. (c) What amount should be shown as a current liability at December 31, 2026? (d) What amount should be shown as a long-term liability at December 31, 2026? (e) Contrary to the assumption in (b) above, assume now that the note requires blended installment payments of $29,187. Prepare the general journal entry to record the first installment payment.22. Subject :- Accounting On August 1, 2022, Colombo Company's treasurer signed a note promising to pay $120,300 onDecember 31, 2022. The proceeds of the note were $116,100.b. Calculate the effective interest rate (APR) on the loan.Note: Enter your answer as a percentage rounded to 1 decimal place (i.e., 32.1).Effective interest rateFor items 15 to 17 BDO Bank loaned P7,500,000 to a borrower on January 1, 2023. The terms of the loan were payment in full on December 31, 2027 plus annual interest payment at 12% beginning December 31, 2023. The interest payment was made as scheduled on December 31, 2023. However, due to financial setbacks, the borrower was unable to make the December 31, 2024 interest payment. The bank considered the loan impaired and projected the cash flows from the loan on December 31, 2024. The bank had accrued the interest on December 31, 2024. Date of cash flow December 31, 2025 December 31, 2026 December 31, 2027 December 31, 2028 Amount projected December 31, 2023 Present value of 1 at 12% P500,000 One period .89 1,000,000 Two periods .80 2,000,000 Three periods.71 4,000,000 Four periods .64 What amount should be recognized as impairment loss for 2024?
- For items 1 to 2 China Bank granted a loan to a borrower on January 1, 2023. The interest rate on the loan is 10% payable annually starting December 31, 2023. The loan matures in five years on December 31, 2027. The data related to the loan are: Principal amount Direct loan origination cost Indirect loan origination cost Origination fee received from borrower P4,000,000 104,410 72,880 526,450 Note: Round-off to four decimal places the PV Factors. The effective interest rate of the loan is? (Round off answer to nearest whole number, e.g. 4%)Interest Greener Pastures Corporation borrowed $1,000,000 on November 1, 2022. The note carried a 6% interest rate with the principal and interest payable on June 1, 2023. Prepare the journal entries for (a) the issued on November 1, (b) the interest accrual on December 31, and (c) the paying off of the note on June 1, 2016. 11/1/2022 12/31/2022 6/1/2023 Carrying valueOn January 1, New York Company borrowed $180,000 to purchase machinery and agreed to pay 5% interest for 6 years on an installment note. Each note payment is due on the last day of the year. What is the total interest expense over the life of the loan? A. $32,779 B. $54,000 C. $33,657 D. $35,463
- On September 30, 2022 World Company borrowed P1, 000, 000 on a 9% note payable. The entity paid the first of four quarterly payments of P264, 200 when due on December 31, 2022. 1. What amount should be reported as interest expense for 2022? A. 90, 000 В. 22,500 C. 67,500 D. 30,000 2. On December 31, 2022, what is the carrying amount of the note payable? A. 758, 300 В. 750, 000 С. 825, 800 D. 735, 800Required information [The following information applies to the questions displayed below.] 1/1 1/1 12/31 12/31 On January 1, Year 1, Brown Company borrowed cash from First Bank by issuing a $76,500 face value, four-year term note that had an 8 percent annual interest rate The note is to be repaid by making annual cash payments of $23,097 that include both interest and principal on December 31 of each year. Brown used the proceeds from the loan to purchase land that generated rental revenues of $35,955 cash per year. b. Organize the information in accounts under an accounting equation. Note: Round your answers to the nearest whole dollar amount. Enter any decreases to account balances with a minus sign. If there is no effect on the Account Titles for Retained Earnings, leave the cell blank. Not all cells will require entry. Event Year 1 Balance Year 2 Beginning balance BROWN COMPANY Effect of Events on the Accounting Equation Year 1, Year 2, Year 3 and Year 4 Liabilities Notes Payable…5 The following selected transactions relate to liabilities of United Insulation Corporation. United's fiscal year ends on December 31. 2016 Jan 13Negotiated a revolving credit agreement with Parish Bank that can be renewed annually upon bank approval. The amount available under the line of credit is $26.0 million at the bank's prime rate. Feb.1 Arranged a three-month bank loan.of $9.0 million with Parish Bank under the line of credit agreement. Interest at the prime rate of 7% was payable at maturity. May 1 Paid the 7% note at maturity. Dec.1 Supported by the credit line, issued $13.0 million of commercial paper on a nine- month note. Interest was discounted at issuance at a 6% discount rate. 31 Recorded any necessary adjusting entry(s). 2017 Sept.1 Paid the commercial paper at maturity. Required: Prepare the appropriate journal entries through the maturity of each liability 2016 and 2017. (If no entry is required for a transaction/event, select "No journal entry required" in the…
- TPo1 Company borrowed $300,000 on January 1, 2010, by issuing a $300,000, 8% mortgage note payable. The terms call for semiannual installment payments of $20,000 on June 30 and December 31. Instructions: Prepare the journal entries to record the mortgage loan and the first two installment payments.For items 11 to 12 LYR Finance Company reports a loan receivable from Choice Company in the amount of P7,500,000. The initial loan's repayments include a 10% interest rate plus annual principal payment of P1,500,000 on January 1 of each year. The loan was made on January 1, 2021. Choice made the P750,000 interest payments for 2021 but did not make the P1,500,000 principal payment nor the P500,000 interest payment in 2022. Choice is having financial difficulty and LYR has concluded that the loan is impaired. Analysis of Choice's financial condition on December 31, 2022 indicates that the principal and interest currently due can be collected but it is probable that no further interest can be collected. The probable amounts and timing collection are determined as follows: December 31, 2023 December 31, 2024 December 31, 2025 Total P2,140,000 3,400,000 2,950,000 P8,490,000 The present value factors at 10% are as follows: 1 period - 0.909; 2 periods 0.826; 3 periods - 0.751 How much is the…On July 8, Action Co. issued an $80,000, 6%, 90-day note payable to Scanlon Co. Assuming a 360-day year, what is the maturity value of the note? a.$84,800 b.$78,800 c.$80,000 d.$81,200