CANA 1F91 Lecture Notes - Lecture 9: King William Island, Beechey Island, Northwest Passage
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QUESTION 6
* Round all answers to the nearest whole dollar. | What amount of Service Revenue was recorded on January 1, 2015? | What amount of interest revenue should be recognized on this note for the year ending December 31, 2016? | What is the Carrying Value of the Note Receivable at December 31, 2016? |
1. On January 1, 2015, ABC rendered services to Z Corp. in exchange for a $105,000, 3 year note. The terms of the agreement require Z Corp. to make semi-annual installment payments of P&I with the first installment due immediately. An annual interest rate of 8% is imputed. Each payment is to be received on Jan 1 and July 1. ABC’s year-end is Dec 31. | $ Blank_1 | $ Blank 2 | $ Blank 3 |
2. On January 1, 2015 ABC rendered services in exchange for a $20,000 cash down payment (this down payment is NOT a PVAD; it is simply made to reduce the amount being financed) and a 3 year $90,000, 6% note. Interest is to be remitted each June 30 and Dec 31. Principal will be remitted at maturity. This customer has a credit rating which requires that money be borrowed at 10%. | $ Blank 4 | $ Blank 5 | $ Blank 6 |
2. Continued… For Scenario #2 above, determine the Total Interest Revenue ABC will recognize over the entire three-year lending agreement. | $ Blank 7 |
1. From Scenario #1, Determine how much Service Revenue was recorded on January 1, 2015: $[Blank_1]
QUESTION 7
From Scenario #1, Determine how much interest revenue should be recognized on this note for the year ending December 31, 2016: $[Blank_2]
0.7142 points
QUESTION 8
For Scenario #1 above, Determine the carrying value of the note as of December 31, 2016: $[Blank_3]
0.7142 points
QUESTION 9
From Scenario #2 above, Determine how much Service Revenue should be recognized on January 1, 2015: $[Blank_4]
0.7142 points
QUESTION 10
From Scenario #2 above, Determine how much Interest Revenue should be reported for the year ended December 31, 2016: $[Blank_5]
0.7142 points
QUESTION 11
For Scenario #2, Determine the Carrying Value of the Note as of December 31, 2016: $[Blank_6]
0.7142 points
QUESTION 12
For Scenario #2 above, determine the Total Interest Revenue ABC will recognize over the entire three-year lending agreement: $[Blank_7]
On January 1, 2016, National Insulation Corporation (NIC) leasedoffice space under a capital lease. Lease payments are madeannually. Title does not transfer to the lessee and there is nobargain purchase option. Portions of the lessee's leaseamortization schedule appear below: Jan. 1 Payments EffectiveInterest Decrease in Balance Outstanding Balance
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1. What is NIC’s lease liability at the inception of the lease(after the first payment)?
2. | What amount would NIC record as a leased asset?
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