On December 31, 2010 the company receives cash payment for the entire settlement amount of the debt security. The embedded derivative is designated as and qualifies as a cash flow hedge of fuel expense. The company purchases the uranium on January 2, 2011 at the December 31, 2010 spot price. How much fuel expense will the company report from the purchase?
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- Gerda Motors purchased custom-made machinery on January 1, 2018, in exchange for a three-year $300,000 note with a stated annual interest rate of 3%, which is paid at the end of each year starting on December 31, 2018 through December 31, 2020. Because it was so custom, Gerda did not know the fair value of the machinery. The market rate for a note of similar risk is 7%. A. What is the value of the machinery capitalized on the balance sheet on January 1, 2018? [ Select ] ["300,000", "273,000", "278,304", "268,508"] B. How much interest expense is recognized on December 31, 2018? [ Select ] ["19,481", "21,000", "9,000", "18,796"] C. What is the carrying value of the note on December 31, 2018? [ Select ] ["278,304", "268,508", "300,000", "288,785"] Please avoid image based solution thnxAt January 1, 2021, Brant Cargo acquired equipment by issuing a five-year, $150,000 (payable at maturity), 4% note. The market rate of interest for notes of similar risk is 10%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required:1. to 3. Prepare the necessary journal entries for Brant Cargo 1. Record the purchase of equipment. January 01, 2021 2. Record the interest expense. December 31, 2021 3. Record the interest expense. December 31, 2022On December 31, 2020, Pearl Limited acquired a machine from Pronghorn Corporation by issuing a $520,000, non–interest-bearing note that is payable in full on December 31, 2024. The company’s credit rating permits it to borrow funds from its several lines of credit at 10%. The machine is expected to have a five-year life and a $80,000 residual value.Click here to view the factor table PRESENT VALUE OF 1.Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1. Using (1) factor tables, (2) a financial calculator, or (3) Excel function PV, calculate the value of the note and prepare the journal entry for the purchase on December 31, 2020. (Hint: Refer to Chapter 3 for tips on calculating and use the amount arrived at by using the time value of money tables for the journal entry.) Please help with the solution in excel
- On January 1, 2021, Dreamlover Corporation purchased equipment from Daydream Company for P3,600,000. Term of payments includes issuing a 5-year noninterest-bearing note payable equally every end of the year. The effective interest rate is 15%. The entity used 2 decimal places for the PVF. Requirements: How much is the initial cost of the equipment?On December 31, 2022, Shamrock plc acquired a computer from Plato Group by issuing a £606,000 zero-interest-bearing note, payable in full on December 31, 2026. Shamrock's credit rating permits it to borrow funds from its several lines of credit at 10%. The computer is expected to have a 5-year life and a £65,000 residual value. (a) Prepare the journal entry for the purchase on December 31, 2022. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to O decimal places e.g. 58,971. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date December 31, 2022 Account Titles and Explanation Debit CreditHips Company purchased an asset with a list price of P130,000 to be delivered on July 1, 2021 with the following payment terms: A deposit of P26,000 is due on June 1, 2021 and cash on delivery of P26,000 is due on July 1, 2021. Three annual payments of P26,000 starting July 1, 2022 and thereafter. The seller waived its normal interest charge of 6% per year. The equipment is expected to last 5 years, with a residual value of P26,000. Hips has a December 31 yearend. What should be the depreciation expense for the year ended December 31, 2021
- Explosib, Inc. acquired two units of equipment on December 31, 2021. The first equipment was purchased in exchange for a ten-year non-interest bearing note requiring annual payment of P1,000,000 every December 31 starting December 31, 2022. The second equipment was acquired by issuing a two-year P6,000,000 non-interest bearing note. The prevailing rate for notes of these types on December 31, 2021 was 12%. What is the total cost of the two units of equipment? Present value factor round to two (2) decimal placesA. 10,130,000 B. 10,450,000 C. 11,130,000 D. 16,470,000 On July 1, 2021, Bulkeyno Inc. exchanged machine with Mawnteyn Company. Bulkeyno’s cost to the machine was P576,000 with related accumulated depreciation of P270,000. Its fair market value was P54,000 higher than its book value. Mawnteyn, on the other hand purchased the machine for P660,000. Carrying value as of the date of exchange was P348,000. Bulkeyno paid Mawnteyn P90,000 for the difference in fair values of the two…On January 1, 2020, Physanto Corp. received in exchange for equipment sold to Viva Inc., an 8% $500,000 note that matures in January 2024. The market rate of interest for similar notes is 12%. Interest is received semi-annually each July 1 and January 1. Round all values to the nearest whole number. Required: A. Complete the partial amortization schedule provided. Place zero in any field that does not require a computed value.Harper Co. funds the acquisition of equipment on January 1, year 8 by issuing a $15,000 non-interest-bearing note payable. Beginning on December 31, year 8, the debt will be paid off in ten equal yearly payments. The market rate of interest for this sort of note is 5%. Given the facts below, how much should Harper Co. report the equipment on its December 31, year 8 balance sheet? For ten periods, the present value of $1 at 5% is 0.61391. The present value of a $1 regular annuity at 5% for ten periods is 7.72173. The current value of a $1 annuity payable in ten periods at 5% is 8.10782 8.10782
- A company buys a debt investment for $316, 000. At the end of 2023, the amortized cost of the investment is $315,000 and the fair value of the investment is $322, 000. The company intends to hold the investment until maturity and does not intend to use the fair value option. Therefore, the company must report the investment at $316,000 on its 2023 year-end balance sheet. True or FalseHappy Sdn Bhd purchased a debt instrument on 1 January 2023 at its fair value of RM5 million. The face value of the instrument was RM12 million with an interest rate of 2.35%. The instrument will mature in three years’ time with a redemption value of RM6.25 million. The market interest rate was 10%. Transaction cost amounted to RM400,000. The directors wish to measure this transaction at amortised cost using the effective interest rate method as it intends to hold the financial instrument to maturity. Required: Discuss the accounting treatment in accordance with the relevant financial reporting standards and where necessary, show how it should be disclosed in the financial statements of Happy Sdn Bhd for the year ended 31 December 2023. Please give calculation in details step by step.The bank has granted an overdraft facility to ABC company for the period. The overdraft facility amount is USD 1700000. The interest rate on the overdraft facility taken is 13% per annum, and the overdraft facility commission is set at 3% and is to be paid in advance. It is anticipated that within the first period (i. e. 100 days), the company will benefit from USD 885000 of the overdraft facility granted, and within the next 170 days from USD 685000 of the overdraft facility granted. Calculate the effective annual cost of using the overdraft facility by the companycompany.