{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Exercise 14-6

# Exercise 14-6 - \$250,000.00 Present value of \$250,000 due...

This preview shows pages 1–2. Sign up to view the full content.

EXERCISE 14-16 (15–20 minutes) (a) 1. January 1, 2008 Land . ....................................................... 200,000.00 Discount on Notes Payable. .................. 137,012.00 Notes Payable. .............................. 337,012.00 (The \$200,000 capitalized land cost represents the present value of the note discounted for five years at 11%.) 2. Equipment. .............................................. 185,674.30 Discount on Notes Payable. .................. 64,325.70* Notes Payable. .............................. 250,000.00

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
EXERCISE 14-16 (Continued) *Computation of the discount on notes payable: Maturity value
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: \$250,000.00 Present value of \$250,000 due in 8 years at 11%—\$250,000 X .43393 \$108,482.50 Present value of \$15,000 payable annually for 8 years at 11% annually—\$15,000 X 5.14612 77,191.80 Present value of the note (185,674.30 ) Discount \$ 64,325.70 (b) 1. Interest Expense. ................................. 22,000.00 Discount on Notes Payable. ...... 22,000.00 (\$200,000 X .11) 2. Interest Expense. ................................. 20,424.17 (\$185,674.30 X .11) Discount on Notes Payable. ...... 5,424.17 Cash (\$250,000 X .06). ................ 15,000.00...
View Full Document

{[ snackBarMessage ]}

### Page1 / 2

Exercise 14-6 - \$250,000.00 Present value of \$250,000 due...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online