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    Ateneo de Zamboanga University

    Uploaded by

    Austin Grace Wee
    1. The document is an accounting assignment containing 8 questions regarding notes payable and interest expense accounting. Specifically, it involves calculating carrying amounts of notes payable, interest expense for various periods, and income from loans. 2. Questions 1-5 involve calculating carrying amounts and interest expense for notes payable issued by various companies for the acquisition of assets and borrowing of money, applying concepts such as discounting notes and recognizing interest expense over time. 3. Questions 6-8 involve more complex scenarios, such as accounting for a multi-year prize to be paid via note and annuity, and calculating income from a loan origination with a nonrefundable fee.

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    Ateneo de Zamboanga University

    Uploaded by

    Austin Grace Wee
    90 views2 pages
    1. The document is an accounting assignment containing 8 questions regarding notes payable and interest expense accounting. Specifically, it involves calculating carrying amounts of notes payable, interest expense for various periods, and income from loans. 2. Questions 1-5 involve calculating carrying amounts and interest expense for notes payable issued by various companies for the acquisition of assets and borrowing of money, applying concepts such as discounting notes and recognizing interest expense over time. 3. Questions 6-8 involve more complex scenarios, such as accounting for a multi-year prize to be paid via note and annuity, and calculating income from a loan origination with a nonrefundable fee.

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    Accounting240

    Original Title

    Assignment

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    1. The document is an accounting assignment containing 8 questions regarding notes payable and interest expense accounting. Specifically, it involves calculating carrying amounts of notes payable, interest expense for various periods, and income from loans. 2. Questions 1-5 involve calculating carrying amounts and interest expense for notes payable issued by various companies for the acquisition of assets and borrowing of money, applying concepts such as discounting notes and recognizing interest expense over time. 3. Questions 6-8 involve more complex scenarios, such as accounting for a multi-year prize to be paid via note and annuity, and calculating income from a loan origination with a nonrefundable fee.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    90 views2 pages

    Ateneo de Zamboanga University

    Uploaded by

    Austin Grace Wee
    1. The document is an accounting assignment containing 8 questions regarding notes payable and interest expense accounting. Specifically, it involves calculating carrying amounts of notes payable, interest expense for various periods, and income from loans. 2. Questions 1-5 involve calculating carrying amounts and interest expense for notes payable issued by various companies for the acquisition of assets and borrowing of money, applying concepts such as discounting notes and recognizing interest expense over time. 3. Questions 6-8 involve more complex scenarios, such as accounting for a multi-year prize to be paid via note and annuity, and calculating income from a loan origination with a nonrefundable fee.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Ateneo de Zamboanga University

    School of Management and Accountancy


    Accounting 240
    ASSIGNEMENT_2nd
    1. On July 1, 2015, Maclloyd Company issued a P4,000,000 note payable for
    money borrowed from Izra, Inc. The one-year, P4,000,000 note payable was
    discounted at 12% and is payable in lump sum on June 30, 2016. How much
    is the carrying amount of the note on initial recording?
    Ans.
    2. On October 1, 2015, Nanely Company acquired land by issuing a two-year,
    12%, P4,000,000 note payable. Principal is due on October 31, 2017 but
    interests are due annually every October 1. Nanely uses the calendar year as
    its accounting period. How much is the interest expense recognized in 2015?
    Ans.
    3. On January 1, 2015, Pearly Company purchased inventory with a list price of
    P4,400,000 and a cash price of P4,000,000 by issuing a noninterest-bearing
    note of P4,800,000 due on December 31, 2017. How much is the carrying
    amount of the note on initial recognition?
    Ans.
    4. Using the same information in number 3 above, how much is the interest
    expense in 2015?
    Ans.
    5. Using the same information in number 3 above, how much is the carrying
    amount of the note on December 31, 2015?
    Ans.
    6. Joanna Company offered a contest in which the winner would receive
    P1,000,000, payable over 20 years. On December 31, 2015 Joanna
    announced the winner of the contest and signed a note payable to the winner
    for P1,000,000, payable in P50,000 installments every January 2. Also on
    December 31, 2015, Joanna purchased an annuity for P418,250 to provide
    the P950,000 prize monies remaining after the first P50,000 installment,
    which was paid on January 2, 2016. In its December 31, 2015 balance sheet,
    what amount should Joanna report as note payable-contest winner, net of
    current portion?
    Ans.
    7. Using the same information in number 6 above, what should Joanna report as
    contest prize expense in its 2015 income statement?
    Ans.
    8. On December 1, 2015, Habbi Company gave Shiendra Company a P200,000,
    11% loan. Habbi paid proceeds of P194,000 after the deduction of a P6,000
    nonrefundable loan origination fee. Principal and interest are due in 60
    monthly installments pf P4,310, beginning January 1, 2016. The repayments
    yield an effective interest rate of 11% at a present value of P200,000 and
    12.4% at a present value of P194,000. What amount of income from this loan
    should Habbi report in itsb2015 income statement?

    Ans.

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