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
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     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
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                     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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