Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. on january 1,2025, rich inc. loans $514,404 to poo

On January 1,2025, Rich Inc. loans $514,404 to Poor Co. in exchange for a $600,000...

60.1K

Verified Solution

Question

Accounting

On January 1,2025, Rich Inc. loans $514,404 to Poor Co. in exchange for a $600,000 zero-interest-bearing promissory note payable in 2 years, with a maturity date of 11?2027. The market rate of interest for a transaction of this nature for Poor Co. is 8%. Rich Inc. has a calendar year-end, and it uses the effective-interest method to record the lending transaction.
(round to the nearest dollar)
(1) Write a journal entry on 11?2025 for Rich Inc. to recognize the loan (show calculations).
(2) Write a journal entry on 1231?2025 for Rich Inc. to recognize the amortization on the Discount on Notes Receivable and the interest earned in 2025(show calculations).
(3) What is the carrying value of the promissory note as of 1231?2025?(calculation only, no journal entry).
(4) Write a journal entry on 12/31/2026 for Rich Inc, to recognize the amortization on the Discount on Notes Receivable and the interest earned during 2026(show calculations).
(5) Write a journal entry on 11?2027 for Rich Inc. to recognize the receipt of the repayment of the note.
image

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

A fisherman can row upstream at 4 mph and downstream at 6 mph. He started...

Basic Math
Q

11.35 g (about one tablespoon) of table sugar (sucrose, C12H22O11) is dissolved in 242.9 mL of...

Chemistry
Q

A student measured the optical activity of an unknown sugar at two different concentrations. The results...

Chemistry
Q

1)   Theories have an important place in psychology. We can understand better ourselves and others behaviors...

Psychology
Q

EXPLAIN WITH YOUR WORDS HOW THE THREE MAJOR ETHICS FUNCTION IN SOCIETY AND FOR MAKING...

Economics
Q

moments d 4qai and dB 2gai placed on the x axis with a separation R...

Physics
Q

For what minimum value of the applied force P there will be no relative motion...

Physics
Q

Let 2 3 and 6 5 k Find k so that a and b will...

Basic Math
Q

QUESTION 4 2 points A population of punishers is described by the DTDS 1 0...

Algebra
Q

Rod Dall Co. reports net income of $75,000. The income ratios are Rod 60% and...

Accounting
Q

Seen Company has the following transactions. Prepare all required journal entries for the following. Journal...

Accounting
Q

please show workings, thank you Sullivan's island Company began operating a subsidiary in...

Accounting