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Phantasy [73]
4 years ago
11

Guido Properties owes First State Bank $60 million under a 7% note with two years remaining to maturity. Due to financial diffic

ulties of Guido, the previous year’s interest ($4.2 million) was not received. The bank agrees to settle the note receivable and accrued interest receivable in exchange for land having a fair value of $44 million and a book value of $ 32 million.
Required:

Prepare all the journal entries required for the settlement on Guido’s books.
Business
1 answer:
Mademuasel [1]4 years ago
3 0

Answer:

Explanation:

The journal entries are shown below:

Notes payable A/c Dr $60,000,000

Interest payable A/c Dr $4,200,000

        To Land A/c $32,000,000

        To Gain on transfer of land $12,000,000

        To gain on settlement of debt $20,200,000

(Being all transactions are recorded and the remaining balance is credited to the gain on settlement of debt)

The Gain on transfer of land is computed below:

= $44 million - $32 million

= $12 million

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3 years ago
Hang Ten Company manufactures surf boards and uses an activityminusbased costing system to allocate all manufacturing conversion
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Answer:

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Explanation:

Giving the following information:

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4 years ago
Carl is furious that the elderly get special senior-citizen discounts on goods and services while young people don't. The name f
densk [106]

Answer: Intergenerational equity

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4 years ago
The journal entry to record the sale of treasury stock might include all of the following except for:
Ghella [55]

Answer:

b. a debit to Paid-In Capital from Sale of Treasury Stock.

Explanation:

Treasury stock is the stock of equity purchased by the company itself, from open market. Basically it has a debit balance. And it is shown as a negative value from common equity in the balance sheet.

Now when there is sale of such treasury stock, this treasury stock will be credited, also in next entry common stock will be credited as it will increase automatically therefore in no circumstances Paid in capital will be debited from sale of treasury Stock.

Final Answer

b. a debit to Paid-In Capital from Sale of Treasury Stock.

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3 years ago
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3 years ago
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