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jarptica [38.1K]
4 years ago
8

On January 1, 2021, Crane Company sold property to Wildhorse Company. There was no established exchange price for the property,

and Wildhorse gave Crane a $5400000 zero-interest-bearing note payable in 5 equal annual installments of $1080000, with the first payment due December 31, 2021. The prevailing rate of interest for a note of this type is 10%. The present value of the note at 10% was $4094064 at January 1, 2021. What should be the balance of the Discount on Notes Payable account on the books of Wildhorse at December 31, 2021 after adjusting entries are made, assuming that the effective-interest method is used?
Business
1 answer:
Olegator [25]4 years ago
3 0

Answer:

interest expense    409,406.4 debit

           note payable              409,406.4 credit

Explanation:

We have to apply the market rate to the carrying value of the note payable:

$4,094,064 x 10% = 409,406.4 interest expense

We will increase the note payable and declare the interest expense

Then, at payment we decrease our note payable account against cash.

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julia-pushkina [17]

Answer:

Correct option is (d)

Explanation:

Utility patent is granted to protect an innovation from being copied by others. Utility patent is granted to protect the functionality or usage of the product while design patent is granted to protect the way the product looks like its appearance or ornamentation.

Utility patent is granted for 20 years from the date the application is file with the US trade office while design patent is granted for 14 years from the date of invention.

Here, McDonald's invention is granted utility patent that protects the product for 20 years from the date application is filed with the US patent office.

6 0
3 years ago
uses two measures of activity, flights and passengers, in the cost formulas in its budgets and performance reports. The cost for
OLga [1]

Answer:

$11,026 Favorable

Explanation:

The computation of the  spending variance for plane operating costs in November is shown below:

= Budgeted cost -  Actual cost

= [(84 × $3,160) + (252 × $18) + $593,00] - $318,250

= $329,276 - $318,250

= $11,026 Favorable

5 0
3 years ago
Grossman lumber reported $102,000 net cash provided by its operating activities. if the company invests $4,000 in capital expend
sweet [91]

FCF is a measure of how much cash a business generates from operations, net of capital expenditures, which it can use for various purposes, such as reducing debt or paying out dividends. When calculating FCF, we take Cash provided by operating activities and subtract any capital expenditures. Grossman Lumber generated $102,000 in cash from operations, and invested 4,000 in capital expenditures, so its FCF is 102,000-4,000= $98,000. We are not concerned with dividends because dividends are not a capital expenditure. 

6 0
3 years ago
In March 2017, Amazon and Clorox reported nearly identical earnings per share, but the stock price of Amazon was more than six t
adoni [48]

Answer:

c. investors see better long-term prospects for Amazon

Explanation:

As we know that Amazon has the more customer base in the market due to which the shareholder predicted the expected profit in upcoming years. The company could run in long run. Even the ompany suffered huge losses due to discount provided but the investors are ready to invest in this company as they seen there is a better and long term prospects

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3 0
3 years ago
A marginal external cost of a product is equal to
Lyrx [107]

Answer:

the answer is D hope that helps you out

4 0
3 years ago
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