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
Troyanec [42]
3 years ago
6

On January 1, 2017, Crown Company sold property to Leary Company. There was no established exchange price for the property, and

Leary gave Crown a $400,000 zero-interest-bearing note payable, promising 5 equal annual installments of $80,000, with the first payment due December 31, 2017. The prevailing rate of interest for a note of this type is 8%.
Required:
What is the carrying value of the notes payable at 12/31/14, after the first payment is made (assuming that the effective-interest method is used)?
Business
1 answer:
Mademuasel [1]3 years ago
6 0

Answer:

Leary Company

The carrying value of the notes payable at December 31, 2017, after the first payment is made (assuming that the effective-interest method is used) is:

= $320,000

Explanation:

a) Data and Calculations:

0% Note payable = $400,000

Payment period = 5

Annual installmental payments = $80,000

Prevailing rate of interest for similar note = 8%

Schedule

Period PV                 PMT            Interest               FV

1 $-591,650.08 $80,000.00 $-47,332.01 $558,982.09

2 $-558,982.09 $80,000.00 $-44,718.57 $523,700.66

3 $-523,700.66 $80,000.00 $-41,896.05 $485,596.71

4 $-485,596.71 $80,000.00 $-38,847.74 $444,444.44

5 $-444,444.44 $80,000.00 $-35,555.56 $400,000.00

Total                     $400,000.00    $-208,349.93

Carrying value

Ending value   = $400,000

Interest expense   -47,332.01

Cash repayment   -32,667.99

Carrying value = $320,000

You might be interested in
The following information is available from the current period financial statements: Net income $165,000 Depreciation expense 28
Natalka [10]

Answer:

The correct answer is 156,000

good luck ❤

8 0
3 years ago
Global Petroleum negotiated a deal with Saudi Arabia in which Global Petroleum would build several refineries in Saudi Arabia an
Lostsunrise [7]

Considering the situation described above, when Global Petroleum negotiated a deal with Saudi Arabia, this is an example of <u>Bartering</u>.

<h3>What is a Bartering?</h3>

Bartering is a transaction agreement whereby both parties agree to pay with goods or services without using money.

Therefore, in this situation, when Global Petroleum negotiated with Saudi Arabia to receive oil as partial payment over 20 years. This is an example of <u>Bartering</u>.

Hence, in this case, it is concluded that the correct answer is <u>Bartering</u>.

Learn more about <u>Bartering</u> here: brainly.com/question/1462751

7 0
2 years ago
Schneider Inc. had salaries payable of $60,000 and $90,000 at the end of Year1 and Year2, respectively. During Year2, Schneider
Fittoniya [83]

Answer:

The correct answer is option (A).

Explanation:

According to the scenario, the given data are as follows:

Salaries payable at the end of year 1 = $60,000

Salaries payable at the end of year 2 = $90,000

Salary expense in year 2 = $620,000

So, we can calculate the cash outflows for salaries in year 2 by using following formula:

Cash outflow = Salary recorded in year 2 + Salaries payable at the beginning of the year - Salaries payable at the end of year

= $620,000 + $60,000 - $90,000

= $590,000

Hence, the cash outflow for salaries in year 2 is $590,000.

3 0
3 years ago
Tax that you pay when making a profit from selling a house is an example of
vovikov84 [41]
The tax you pay when making a profit from selling a house is an example of Capital Gains Tax because you are selling it for more than what you paid for it. Capital Gains Tax is defined as a tax on a profit from the sale of property or a investment. 
8 0
3 years ago
Read 2 more answers
Melissa is an automobile owner. What will most likely occur if she misses a car payment?
Vika [28.1K]
Late fee or even repo
5 0
2 years ago
Other questions:
  • Rachel jogs in the morning. her friend, who is jogging behind her, only has a 50 percent chance of calling out to her when she i
    11·2 answers
  • Students arrive at the Administrative Services Office at an average of one every 15 minutes, and their requests take on average
    14·1 answer
  • Describe the four goals of human resource management with examples and explanation of what is meant by the goal.
    9·1 answer
  • Because __________ often provide little benefit to consumers, governments have, at times, been asked to rebalance markets and re
    8·1 answer
  • In the quest to achieve competitive advantage in global markets, competitive pressures require that firms do what they can to __
    7·1 answer
  • Two methods are used to predict how many customers will call in for help in the next four days. The first method predicts the nu
    9·1 answer
  • Mountain Teas wants to raise $14.9 million to open a new production facility. The company estimates the issue costs for legal an
    7·1 answer
  • Typical Corp. reported a deferred tax liability of $6,000,000 for the year ended December 31, 2017, when the tax rate was 40%. T
    8·1 answer
  • Executive headhunters have approached Charles about taking the position of senior vice president of marketing for a well-known c
    15·1 answer
  • At the end of its first month of operations, a company reported Revenue of $37,000. It also reported Wages Expense, $6,000; Rent
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!