Feasible Company

1.) 2020 Cash 1,000,000

Note receivable 6,000,000
Land 5,000,000
Gain on sale of land 2,000,000

2.) 2021 Accrued interest receivable (6M*12%) 720,000

Interest income 720,000

3.) 2022 Cash 7,526,400

Note receivable 6,000,000
Accrued interest receivable 720,000
Interest income 806,400
Bygone Company

Journal entries for the current year:

To record sale:
Note receivable 600,000
Sales 540,000
Unearned interest income 60,000

To record collection:
Cash 200,000
Unearned interest income 30,000
Note receivable 200,000
Interest income 30,000
Innovative Company

Journal entries for the current year:

Cash 100,000
Note receivable 900,000
Electrical generator 700,000
Gain on sale of equipment (720,540+100,000-700,000) 120,540
Unearned interest income (900,000-(300,000*2.4018) 179,460

Cash 300,000
Notes Receivable 300,000

Unearned interest income 86,465.00

Interest income (300,000*2.4018*12%) 86,465.00
(720,540+100,000-700,000)
(900,000-(300,000*2.4018)
Gullible Company

Requirement1
a.) 2020

Note receivable 2,500,000

Sales 1,995,000
Unearned interest income 505,000

b.) 2021

Cash 500,000
Note receivable P500,000

Unearned interest income 159,600

Interest income 159,600

Requirement2

Note receivable, end (2,500,000-500,000) P 2,000,000

Unearned interest income, end (505,000-159,600) -345,400
Carrying Amount P 1,654,600

Requirement3

Date Annual Collection Interest Income

Dec. 31, 2020 8%
Dec. 31, 2021 500,000 159,600
Dec. 31, 2022 500,000 132,368
Dec. 31, 2023 500,000 102,957
Dec. 31, 2024 500,000 71,194
Dec. 31, 2025 500,000 38,881
Principal Present Value
1,995,000
340,400 1,654,600
367,632 1,286,968
397,043 889,925
428,806 461,119
461,119 0
Enigma Company

Jan-01 Cash P 125,000

Note receivable 400,000
Accumulated Depreciation (500,000-350,000) 150,000
Equipment P 500,000
Gain on sale 59,720
Unearned interest income 115,280

Dec-31 Unearned interest income 34,166

Interest income 34,166

2021 Unearned interest income P 38,266

Interest income P 38,266

2022 Unearned interest income P 42,848

Interest income P 42,848

2023 Cash P 400,000

Note receivable P 400,000
5pts
Remarkable Company

Determine the amount of notes receivable including accrued interest

that should be classified as current asset on Dec. 31, 2020.

Note receivable
Accrued interest (5,000,000*9%*8/12)
Principal payment of note receivable:
Annual interest
Interest from 7/1/2020 to7/1/2023 880,000
(280,000)
Accrued interest on notes receivable (land) (1/2*280,000)
Total current receivable

Determine the amount of notes receivable that should be classified as

noncurrent asset on Dec. 31,2020

Note receivable (building)

Note receivable (officer)
Note receivable (land) - noncurrent portion:
Principal
Due July 1, 2022 - current portion
Total noncurrent note receivable
2,500,000
300,000

600,000
140,000
3,540,000

2pts

2,500,000
2,000,000

2,200,000
6,700,000
Prob. 6-7 Prob. 6-12 Prob. 6-16
1.) A 1.) D 1.) D
2.) B 2.) C 2.) A
3.) B 3.) B
Prob. 6-8 4.) D 4.) A
1.) A
Prob. 6-13 Prob. 6-17
Problem 6-9 1.) A 1.) A
1.) C 2.) C 2.) B
3.) C 3.) C
Prob. 6-10 4.) D 4.) B
1.) A 5.) C
2.) B Prob. 6-14 6.) B
1.) C 7.) D
Prob. 6-11 8.) B
1.) B Prob. 6-15 9.) D
2.) C 1.) D 10.) B
3.) A 2.) D
4.) A