I need help solving the following problems:
1. On September 1, 2013, V&S Inc. issues a note payable toRegional Bank for $1,200,000, bearing interest at 12%, and payablein three equal annual principle payments of $400,000. On this date,the bank's prime rate was 11%. The first payment for interest andprincipal was made on September 1, 2014. At December 31, 2014,V&S should record accrued interest payable of?
2. On January 1, 2014, Ann Price loaned $112,695 to Joe Kiger. Azero-interest bearing note (face amount $150,000) was exchanged forcash. The note is to be repaid on December 31, 2016. The prevailingrate of interest for a loan of this type is 10%. The present valueof the $150,000 at 10% for three years is $112,695. What amount ofinterest income should Ms. Price recognize in 2014?
I need help solving the following problems:
1. On September 1, 2013, V&S Inc. issues a note payable toRegional Bank for $1,200,000, bearing interest at 12%, and payablein three equal annual principle payments of $400,000. On this date,the bank's prime rate was 11%. The first payment for interest andprincipal was made on September 1, 2014. At December 31, 2014,V&S should record accrued interest payable of?
2. On January 1, 2014, Ann Price loaned $112,695 to Joe Kiger. Azero-interest bearing note (face amount $150,000) was exchanged forcash. The note is to be repaid on December 31, 2016. The prevailingrate of interest for a loan of this type is 10%. The present valueof the $150,000 at 10% for three years is $112,695. What amount ofinterest income should Ms. Price recognize in 2014?
Related questions
| The following selected transactions were taken from the books of Aliceville Company for 2014: |
| 1. | On March 1, 2014, borrowed $48,000 cash from the local bank. The note had a 7 percent interest rate and was due on September 1, 2014. |
| 2. | Cash sales for the year amounted to $225,000 plus sales tax at the rate of 7 percent. |
| 3. | Aliceville provides a 90-day warranty on the merchandise sold. The warranty expense is estimated to be 3 percent of sales. |
| 4. | Paid the sales tax to the state sales tax agency on $200,000 of the sales. |
| 5. | Paid the note due on September 1 and the related interest. |
| 6. | On October 1, 2014, borrowed $50,000 cash from the local bank. The note had a 10 percent interest rate and a one-year term to maturity. |
| 7. | Paid $3,200 in warranty repairs. |
| 8. | A customer has filed a lawsuit against Aliceville for $100,000 for breach of contract. The company attorney does not believe the suit has merit. |
| Correct | |||
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Correct
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