On January 1, 2021, Crane Company sold property to Wildhorse Company. There was no established exchange price for the property, and Wildhorse gave Crane a $5400000 zero-interest-bearing note payable in 5 equal annual installments of $1080000, with the first payment due December 31, 2021. The prevailing rate of interest for a note of this type is 10%. The present value of the note at 10% was $4094064 at January 1, 2021. What should be the balance of the Discount on Notes Payable account on the books of Wildhorse at December 31, 2021 after adjusting entries are made, assuming that the effective-interest method is used?
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “On January 1, 2021, Crane Company sold property to Wildhorse Company. There was no established exchange price for the property, and ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
In the Month of March, Baldwin received orders of 113 units at a price of $15.00 for their product Bell. Baldwin uses the accrual method of accounting and offers 30 day credit terms. Baldwin delivers 113 units in April.
Answers (1)
The Revenue or Yield Management model can be applied only when price differential for the same product (or service) is permissible True False
Answers (1)
Buying inventory in large lots to take advantage of quantity discounts can be responsible for a high inventory turnover ratio. True/False
Answers (1)
Investment bankers who join together to share the financial risk associated with buying an entire issue of new securities and reselling them to the public is called a (n) A) selling group. B) tombstone group. C) underwriting syndicate.
Answers (1)
Other things the same, if reserve requirements are increased, the reserve ratio a. increases, the money multiplier increases, and the money supply increases. b. increases, the money multiplier decreases, and the money supply decreases. c.
Answers (1)
New Questions in Business
A 30-year 6% callable corporate bond with a face value of $10,000 was issued in June of 2000. It is now June of 2015, the call protection has expired, and the bond can be immediately called at a call price of 102% of par.
Answers (1)
Demand-pull inflation occurs when the price of goods rises suddenly and extremely fast. consumers show an interest in purchasing more goods. producers need more money to make and distribute goods.
Answers (1)
Consider a $1,000 par value bond with a 9% annual coupon. The bond pays interest annually. There are 20 years remaining until maturity. You have expectations that in 5 years the YTM on a 15-year bond with similar risk will be 7.5%.
Answers (1)
Mallory hires Raghav to work for one year as an assistant manager at $5,500 per month, reserving the right to cancel the contract at any time. After two months, Mallory fires Raghav because the company's order volume drops.
Answers (1)
Which of the following terms best describes the cumulative value of net income or loss not taken out of the business? (A) Short-term capital. (B) Contributed capital. (C) Working capital. (D) earned capital.
Answers (1)