Business, 11.02.2020 00:18 narnar5664

On January 1, 2021, Byner Company purchased a used tractor. Byner paid $6,000 down and signed a noninterest-bearing note requiring $39,000 to be paid on December 31, 2023. The fair value of the tractor is not determinable. An interest rate of 11% properly reflects the time value of money for this type of loan agreement. The company’s fiscal year-end is December 31.
Required:
1. Prepare the journal entry to record the acquisition of the tractor.
2. How much interest expense will the company include in its 2021 and 2022 income statements for this note?
3. What is the amount of the liability the company will report in its 2021 and 2022 balance sheets for this note?

Answers: 2

Show answers

Answers

Answer from: GreenHerbz206

Answer Part 1:

1. The Journal Entry

The journal entry to record the acquisition of the tractor.

Sr. No Particulars Debit Credit

1. Tractor- Machinery $ 45000

Cash $6000

Notes Payable $ 39,000

Answer Part 2 :

Formula :

Interest amount = P(1+r)^n -P

Where

r= interest rate =11%

n= time

P= principal amount =$39000

Interest Expenses to be reported :

In 2021's income statement= $39000 * 1.11 -$39000=$4290

In 2022's income statement=$39000 * 1.11^2 -$39000 * 1.11=$4822

Answer Part 3)

Amount liability in the balance sheet:

Of 2021 = $39000+$4290=$43290

Of 2022=$43290+$4822=$4822

Know more :

link

Answer from: Tyrant4life

1. The Journal Entry

Sr. No Particulars Debit Credit

Tractor- Machinery $ 45000

Cash $6000

Notes Payable $ 39,000

The journal entry to record the acquisition of the tractor.

Working : Interest Expense Payable:

11% of 39,000= $ 4290

2. Income Statement of 2021

Revenues

Less

Depreciation

Interest Expense 4290

Profit

2. Income Statement of 2022

Revenues

Less

Depreciation

Interest Expense 4290

Profit

3. Balance Sheet of 2021

Debit Side

Truck $45000

Less Depreciation

Credit Side

Interest Payable 4290

3. Balance Sheet of 2022

Debit Side

Truck $45000

Less Depreciation

Credit Side

Interest Payable 4290

Answer from: Quest

What do you mean by that?

Answer from: Quest

the first successful, urban blues recording, selling more than 75,000 copies, was made in year 1920.

mamie smith recorded the first commercially successful example of the urban blues, with the recording of “crazy blues”."crazy blues" was recorded on august 10, 1920, in new york city. within a month of the release of “crazy blues” it had sold 75,000 copies.

Another question on Business

Business, 21.06.2019 22:10

Arival company manufactures fuel tanks for cars using a different production technique. the total weekly cost (in dollars) of producing x tanks is given by c(x) = 10000 +90x - 0.04x2 find the marginal cost at a production level of 500 fuel tanks per week to approximate the cost of the 501st unit (round to the nearest 2 decimal places, if needed)

Answers: 3

Answer

Business, 22.06.2019 12:10

Bonds often pay a coupon twice a year. for the valuation of bonds that make semiannual payments, the number of periods doubles, whereas the amount of cash flow decreases by half. using the values of cash flows and number of periods, the valuation model is adjusted accordingly. assume that a $1,000,000 par value, semiannual coupon us treasury note with three years to maturity has a coupon rate of 3%. the yield to maturity (ytm) of the bond is 7.70%. using this information and ignoring the other costs involved, calculate the value of the treasury note:

Answers: 1

Answer

Business, 22.06.2019 14:00

Bayside coatings company purchased waterproofing equipment on january 2, 20y4, for $190,000. the equipment was expected to have a useful life of four years and a residual value of $9,000. instructions: determine the amount of depreciation expense for the years ended december 31, 20y4, 20y5, 20y6, and 20y7, by (a) the straight-line method and (b) the double-declining-balance method. also determine the total depreciation expense for the four years by each method. depreciation expense year straight-line method double-declining-balance method 20y4 $ $ 20y5 20y6 20y7 total $

Answers: 3

Answer

Business, 22.06.2019 19:00

12. to produce a textured purée, you would use a/an a. food processor. b. wide-mesh sieve. c. immersion blender d. food mill.

Answers: 1

Answer

You know the right answer?

On January 1, 2021, Byner Company purchased a used tractor. Byner paid $6,000 down and signed a noni...

Questions