# Problem 5 - Problem53 2008 Jan.1 Equipment Dec.31...

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Problem  5-3 2008 Jan.    1   Equipment 600,000    Note payable 600,000 Dec. 31    Note payable 300,000    Interest expense (12% x 600,000)   72,000     Cash 372,000  2009 Dec. 31   Note payable 300,000   Interest expense (12% x 300,000)   36,000  Cash 336,000 Problem 5-4 1. Land   1,000,000      Cash 100,000    Note payable 900,000 2. Interest expense (10% x 900,000)   90,000    Accrued interest payable   90,000

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3. Interest expense   99,000    Accrued interest payable (900,000 + 90,000 x 10%)   99,000 4. Note payable 900,000     Accrued interest payable 189,000 Cash   1,089,000         89 Problem 5-5 1. Machinery 750,000     Discount on note payable 250,000    Cash 200,000    Note payable 800,000 2. Note payable 200,000     Cash 200,000 3. Interest expense 100,000    Discount on note payable 100,000
Year Note payable Fraction Amortization 2008 800,000 8/20 100,000 2009 600,000 6/20   75,000 2010 400,000 4/20   50,000 2011                  200,000     2/20   25,000   2,000,000 250,000 Problem 5-6 1. Building (500,000 + 3,602,700)   4,102,700     Discount on note payable 897,300     Cash 500,000      Note payable   4,500,000     Face of note   4,500,000     Present value (1,500,000 x 2.4018)   3,602,700     Imputed interest                   897,300     2. Note payable   1,500,000     Cash   1,500,000 3. Interest expense 432,324     Discount on note payable (12% x 3,602,700) 432,324

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Problem 5-7 1. Land (1,250,000 + 2,847,200)   4,097,200     Discount on note payable   1,152,800     Cash   1,250,000     Note payable   4,000,000         90     Face value of note payable   4,000,000     Present value (4,000,000 x .7118)   2,847,200     Imputed interest   1,152,800 2. Interest expense 341,664     Discount on note payable (12% x 2,847,200) 341,664 3. Note payable   4,000,000     Cash   4,000,000 Problem 5-8 1. Total liability   6,000,000     Less: Book value of property: Land   1,500,000 Building   4,200,000   5,700,000
300,000     2. Mortgage payable   5,000,000     Accrued interest payable   1,000,000     Accumulated depreciation   1,800,000     Land   1,500,000     Building   6,000,000     Gain on extinguishment of debt 300,000 Problem 5-9 1. Note payable  1,000,000 Accrued interest payable     200,000 Investment in equity securities    600,000 Gain on extinguishment of debt    600,000 2. Note payable 1,000,000 Accrued interest payable    200,000      Investment in equity securities

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## This note was uploaded on 01/22/2012 for the course 3131 3462 taught by Professor Camus during the Spring '11 term at Central Luzon State University.

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Problem 5 - Problem53 2008 Jan.1 Equipment Dec.31...

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