Mhecloudmcg r aw hillcomhmaccounting tpxtodo pr

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Unformatted text preview: .tpx?todo= pr intviewSing le 1/4 2/25/14 Assig nment Pr int View Ca sh Pa ym e nt Bond Inte re st Ex pe nse Discount Am ortiz a tion Ca rrying Va lue $ 484,712 1$ 58,165 $ 34,165 518,877 2 24,000 62,265 38,265 557,142 3 Tota l 24,000 $ 24,000 66,858 42,858 600,000 187,288 $ 115,288 $ 72,000 $ 3. Prepare the journal entries to rec ord (a) interes t for eac h of the three y ears and (b) pay ment of the note at maturity . (If no journa l e ntry is re quire d for a e ve nt, se le ct "No journa l e ntry re quire d" in the first a ccount fie ld.) Eve nt 1 Ge ne ra l Journa l Interes t ex pens e De bit Cre dit 58,165 Dis c ount on notes pay able Cas h 2 34,165 24,000 Interes t ex pens e 62,265 Dis c ount on notes pay able Cas h 3 38,265 24,000 Interes t ex pens e 66,858 Dis c ount on notes pay able Cas h 4 42,858 24,000 Notes pay able Cas h Exercise 600,000 600,000 Learning Objective: 14-03 Characterize the accounting treatm ent of notes , including ins tallm ent notes , is s ued for cas h or for noncas h cons ideration. Amber Mining and Milling, Inc ., c ontrac ted with Truax Corporation to have c ons truc ted a c us tom-made lathe. The mac hine was c ompleted and ready for us e on January 1, 2013. Amber paid for the lathe by is s uing a $600,000, three-y ear note that s pec ified 4% interes t, pay able annually on Dec ember 31 of eac h y ear. The c as h mark et pric e of the lathe was unk nown. It was determined by c omparis on with s imilar trans ac t...
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This homework help was uploaded on 03/22/2014 for the course ACC 3000 taught by Professor He during the Fall '09 term at CUNY Baruch.

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