1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
kolbaska11 [484]
3 years ago
5

At January 1, 2021, Brainard Industries, Inc., owed Second BancCorp $28 million under a 10% note due December 31, 2023. Interest

was paid last on December 31, 2019. Brainard was experiencing severe financial difficulties and asked Second BancCorp to modify the terms of the debt agreement. After negotiation Second BancCorp agreed to:Forgive the interest accrued for the year just ended.Reduce the remaining two years’ interest payments to $2 million each and delay the first payment until December 31, 2022.Reduce the unpaid principal amount to $20 million.Required:Prepare the journal entries by Brainard Industries, Inc., necessitated by the restructuring of the debt at (1) January 1, 2021; (2) December 31, 2022; and (3) December 31, 2023.
Business
1 answer:
sammy [17]3 years ago
5 0

Answer:

note payable      8,000,000 debit

interest payable 2,800,000 debit

     gain on troubled debt restructuring  10,800,000 credit

--Jan 1st 2021--

interest expense  2,000,000 debit

     interest payable    2,000,000 credit

--Dec 31th 2022--

interest expense  2,000,000 debit

     interest payable    2,000,000 credit

--Dec 31th 2023--

note payable 20,000,000 debit

            cash          20,000,000 credit

--Dec 31th 2023--

Explanation:

28,000,000  // principal

<u>+ 2,800,000</u> // 2020 Dec 31th interest payable

30,800,000

<em><u>after negotiation:</u></em>

2,800,000 interest expense forgiven.

interest payment decrease to 2,000,000 from 2,800,000

Then, principal reduced to 20,000,000 from 28,000,000

You might be interested in
There exists a(n)
FrozenT [24]

Answer:

Direct, upward sloping

Explanation:

Supply refers to the quantities of goods or services that firms are willing to sell to the markets are a specific price. As per the law of supply, an increase in prices leads to an increase in the quantity supplied. Therefore, the relationship between the price and quantity supplied is direct. Firms prefer to supply more products to the markets at higher prices because they will make more profits.

The supply curve is a graphical presentation of the relationship between price and quantity supplied.  The supply curve is upward sloping. It originates from the bottom left corner, showing how quantities vary along the curve at different prices. Quantity supplied increases as the price rise.

7 0
3 years ago
In capitalism what does competition do for consumers?
Aleks [24]

D. It keeps prices fair for consumers

3 0
3 years ago
Read 2 more answers
For which of the following businesses would the job order cost system be appropriate? a.oil refinery b.canned soup processor c.l
attashe74 [19]

Answer:

The correct answer is letter "C": lumber mill.

Explanation:

Job orders are forms that are given to workers that typically represent a third party to a company so they can perform a specific work. Besides, the job order includes the time expected for the worker to finish the job, the estimated wage charged, the materials needed to perform the job, and the number of employees necessary.

<em>Lumber mills</em> typically work with job orders to provide with cut pieces of wood to furniture enterprises.

4 0
3 years ago
Petra's Programming competes on cost with WonderWeb in the web design industry. Both firms operate on a 90 percent learning curv
vladimir1956 [14]

Answer:

The correct answer is (D)

Explanation:

Petra programming and wonder web both are operating on a 90 present curve level and that is the maximum they can achieve with the given resources. To compete and take cost leadership positions they must improve the resources. Likewise, the best way is to improve existing technology. New technology will help them achieve cost leadership position and move further on the learning curve.

7 0
3 years ago
Frank purchased land containing oil reserves for $425,000. He has calculated his cost depletion for the year to be $20 per barre
leva [86]

Answer:

1 of 3.  $52,000

2 of 3. $68,000

3 of 3 Percentage depletion

Explanation:

The percentage depletion rate = 15% of gross income and limited to 65% of the net income

The gross income = $600,000

The operating expense = $520,000

The net income = $600,000 - $520,000 = $80,000

Therefore at 15% gross income, we have;

Percentage depletion rate = $600,000 × 0.15 = $90,000

65% of the net income gives;

$80,000 × 0.65 = $52,000

1 of 3. Therefore since 15% of the gross income ($90,000) > 65% of the net income($52,000), we have

The percentage depletion rate = $52,000

2 of 3. Therefore, he can deduct $120,000 - $52,000  = $68,000

3 of 3 He should therefore use the percentage depletion method to maximize his deductions

We therefore have;

Assuming this is domestic production, the amount of percentage depletion expense is _$52,000_. If he uses this method he can deduct _$68,000_ for tax purposes. He should use the _percentage depletion_ method to maximize his deductions.

6 0
2 years ago
Other questions:
  • Suppose you are an analyst in the oil refinery industry and are responsible for estimating the equilibrium price and quantity of
    11·1 answer
  • In 2019, Jose paid the following amounts for his son to attend Big State University: Tuition $15,000 Room and board 10,500 Books
    15·1 answer
  • In the 21st century, we define justice as:
    14·1 answer
  • On March 18, James Smith purchased $5,000 of furniture from Home Furnishings on account. The cost of the goods was $3,000. On Ma
    11·1 answer
  • During her psychology test, Kelsey could not remember the meaning of the term MNEMONICS. Surprisingly, however, she accurately r
    14·1 answer
  • Incurred manufacturing overhead costs a. $6,000 in indirect materials b. $9,200 in indirect labor (credit Wages Payable) c. $4,7
    7·1 answer
  • The country of Micronesia is currently experiencing a recessionary gap. The size of the recessionary gap is $500 billion. If the
    12·1 answer
  • Vulcan Service Co. experienced the following transactions for Year 1, its first year of operations: Provided $82,000 of services
    10·1 answer
  • An institutional client wishes to open an account at a brokerage firm, but wants the positions in the account held at a bank and
    13·1 answer
  • What is the definition of revenue cycle management?
    11·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!