PPE LN in-class solution posted

PPE LN in-class solution posted - PPE(Ch 10&11 Page 3 Date...

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PPE(Ch 10&11) Page 3 Total payment $3,600,000 WA $2,050,000 Date Payment Months outstanding Weighted average expenditure January 1 $600,000 *12/12 $600,000 March 31 1,200,000 *9/12 $900,000 June 30 800,000 *6/12 $400,000 September 30 600,000 *3/12 $150,000 December 31 400,000 *0/12 $0
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PPE(Ch 10&11) Page 3 Date Payment Months outstanding Weighted average expenditure January 1 $600,000 *12/12 $600,000 March 31 1,200,000 *9/12 $900,000 June 30 800,000 *6/12 $400,000 September 30 600,000 *3/12 $150,000 December 31 400,000 *0/12 $0
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PPE(Ch 10&11) Page 6-7 a. EXAMPLE 3: PURCHASE OF PP&E with ZERO-INTEREST DEBT Villanova Inc. has decided to purchase equipment from Central Michigan Industries on January 2, 2010 to expand its production capacity to meet customers’ demand for its product. Villanova issues a $500,000, 5-year, zero-interest-bearing note to Central Michigan for the new equipment when Date (1) Cash Paid (principal) (2) Interest Expense(8%) = prior (4) * 8% (3) decrease in Carrying Amount = (1) – (2) (4) Carrying Amount of Note = prior (4) – (3) 1/2/10 $399,271 12/31/10 $100,000 $31,942 $68,058 331,231 12/31/11 100,000 26,497 73,503 257,710
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PPE(Ch 10&11) Page 6-7 i. Prepare the journal entries that Villanova will make at the date of purchase.
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PPE LN in-class solution posted - PPE(Ch 10&11 Page 3 Date...

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