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    Solutions For Notes and Loans Receivable

    Uploaded by

    Kenaniah Sanchez
    1. The document contains several problems involving notes receivable and loans receivable. It provides information on principal amounts, interest rates, present values, cash collections, and gains/losses on sales. 2. Problem 1 involves two notes receivable totaling $1,782,000 at year-end. Problem 2 involves the sale of a note receivable for equipment with a gain of $825,000. 3. Problem 3 outlines annual collections on a $5 million note receivable. Problem 4 involves the sale of a note at a $300,000 loss. Problem 5 calculates total interest income as $556,000 on a $2,504,500 loan.

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    Solutions For Notes and Loans Receivable

    Uploaded by

    Kenaniah Sanchez
    35 views4 pages
    1. The document contains several problems involving notes receivable and loans receivable. It provides information on principal amounts, interest rates, present values, cash collections, and gains/losses on sales. 2. Problem 1 involves two notes receivable totaling $1,782,000 at year-end. Problem 2 involves the sale of a note receivable for equipment with a gain of $825,000. 3. Problem 3 outlines annual collections on a $5 million note receivable. Problem 4 involves the sale of a note at a $300,000 loss. Problem 5 calculates total interest income as $556,000 on a $2,504,500 loan.

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    Solutions-for-Notes-and-Loans-Receivable

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    1. The document contains several problems involving notes receivable and loans receivable. It provides information on principal amounts, interest rates, present values, cash collections, and gains/losses on sales. 2. Problem 1 involves two notes receivable totaling $1,782,000 at year-end. Problem 2 involves the sale of a note receivable for equipment with a gain of $825,000. 3. Problem 3 outlines annual collections on a $5 million note receivable. Problem 4 involves the sale of a note at a $300,000 loss. Problem 5 calculates total interest income as $556,000 on a $2,504,500 loan.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    35 views4 pages

    Solutions For Notes and Loans Receivable

    Uploaded by

    Kenaniah Sanchez
    1. The document contains several problems involving notes receivable and loans receivable. It provides information on principal amounts, interest rates, present values, cash collections, and gains/losses on sales. 2. Problem 1 involves two notes receivable totaling $1,782,000 at year-end. Problem 2 involves the sale of a note receivable for equipment with a gain of $825,000. 3. Problem 3 outlines annual collections on a $5 million note receivable. Problem 4 involves the sale of a note at a $300,000 loss. Problem 5 calculates total interest income as $556,000 on a $2,504,500 loan.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 4

    Note Receivable

    Problem 2
    NR - Hart Co. 1,000,000
    NR - Maxx Co.
    Prin 1,000,000
    Interest
    (P1M x 3% x 5) 150,000
    Maturity Value 1,150,000
    X PVF 0.680 782,000
    Total NR @ year-end 1,782,000

    Problem 3 Annual
    Face of the Note 5,000,000 Date Collection
    PV of the Note (P500k x 5.65) 2,825,000 12/31/18
    Unearned Interest Income 2,175,000 12/31/19 500,000
    12/31/20 500,000
    Sales Price (PV of the Note) 2,825,000
    CV of the Equipment 2,000,000
    Gain on Sale 825,000
    Note Receivable - 12/31/19 (P5M - P500k)
    Note Receivable 5,000,000 Unearned Interest Income
    Equipment 2,000,000 (P2,175,000 - P339,000)
    Gain on Sale 825,000 CV - 12/31/19
    Unearned Interest Income 2,175,000

    Problem 4
    Face of the Note 6,000,000
    PV of the Note (P6M x 0.75) 4,500,000
    Unearned Interest Income 1,500,000

    PV of the Note 4,500,000


    x Interest 10%
    Interest Income - 2018 450,000

    Sales Price (PV of the Note) 4,500,000


    CV of the Equipment 4,800,000
    Loss on Sale (300,000)

    Note Receivable 6,000,000


    Loss on Sale 300,000
    Equipment 4,800,000
    Unearned Interst Income 1,500,000
    Problem 5
    Total payments (P500,900 x 5) 2,504,500
    PV of the Note 1,948,500
    Total Interst Income 556,000
    (Principal
    Loans Receivable X Nominal
    Problem 1 Rate)
    Interest
    Origination Fee 342,100 Date Received
    Origination Cost 150,000 1/1/18
    Unearned Interst Income 192,100 12/31/18 400,000
    12/31/19 400,000
    Loan Receivable 4,000,000 12/31/20 400,000
    Unearned Interst Income 192,100
    CV of the Loan Receivable 3,807,900 2018
    Cash
    Loan Receivable 4,000,000 Interst Income
    Cash 4,000,000
    # Unearned Interst Income
    Cash 342,100 Interst Income
    Unearned Interst Income 342,100
    # 2019
    Unearned Interst Income 150,000 Cash
    Cash 150,000 Interst Income

    Unearned Interst Income


    Interst Income

    2020
    Cash
    Interst Income

    Unearned Interst Income


    Interst Income

    Problem
    Interest Income (P1,940,000 x 13.4% x 1/12) 21,663

    Acc Int. R'ble (P2M x 12% x 1/12) 20,000


    12%
    Interest Present
    Income Principal Value
    2,825,000
    339,000 161,000 2,664,000
    319,680 180,320 2,483,680

    OR
    4,500,000

    1,836,000
    2,664,000
    ( CV x
    Effective
    Interst)
    Interest Carrying
    Income Amort Value
    3,807,900
    456,948 56,948 3,864,848
    463,782 63,782 3,928,630
    471,436 71,371 4,000,000
    192,100

    400,000
    400,000

    56,948
    56,948

    400,000
    400,000

    63,782
    63,782

    400,000
    400,000

    71,371
    71,371

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