Problem 8-10 JOSHUA COMPANY

1. PV of note payable on 1/1/2010 (600,000 x 3.60) 2,160,000

Answer: B. 2,160,000

2. Interest expense for 2010 ( 2,160,000 x 12% ) 259, 200

Answer: A. 259,200

Problem 8-11 MANN COMPANY

Note Payable on October 1, 2019 3,600,000

Payment on October 1, 2020 (1,200,000)
Balance 2,400,000
Accrued Interest Payable (Oct. 1, 2020 - June 30, 2020)
(2,400,000 x 10% 9/12) 180,000
Answer: B. 180,000

Problem 8-12 BART COMPANY

Ordinary annuity for eight period 200,000
PV of an ordinary annuity of 1 and 11% for 8 periods 5.146
Carrying amount of notes payable (200,000x 5.146) 1,029,200
Answer: B. 1,029,200

Problem 8-13 PARES COMPANY

Interest expense for 2010 ( 2,550,000 x 12% ) 306,000
Answer: C. 306,000

Problem 8-14 ROTH COMPANY

Solution:The note payable is shown at face value because it is short-term and made in the usual terms
Answer: B. P1,000,000

Problem 8-15 PINE COMPANY

Note Payable, September 1, 2019 1,800,000

Payment on September 1, 2020 ( 600,000)
Balance 1,200,000
Accrued Interest Payable (Sept. 1 - Dec. 31, 2020)
(1,200,000 x 12% x 4/12) 48,000
Answer: B. 48,000

Problem 8-16 ALPHA COMPANY

Loan 1 1,000,000 x 12% x 12/12 = 120,000

Loan 2 (1,000,000+120,000) x 12% x 10/12= 112,000
Total interest expense (120,000 + 112,000) = 232,000

Answer: C. 232,000

Problem 8-17 SOLEMN COMPANY

1,388,560

Problem 8-18 EASY COMPANY

Note Payable, October 1, 2019 1,200,000

Payment on October 1, 2020 ( 400,000)
Balance - October 1, 2020 800,000
Interest Paid (Jan.1 - Sept. 30, 2020)
(1,200,000 x 15% x 9/12) 135,000
Interest Accrued (Oct. 1 - Dec. 31, 2020)
(800,000 x 15% x 3/12) 30,000
Interest Expense 165,000
Answer: A. 165,000

Problem 8-19 LOOB COMPANY

 Loan 1 500,000 x 12% x 10/12 = 50,000   (10 months in 20X2)

 Loan 2 1,500,000 x 12% x 6/12 = 90,000 (6 months in 20X2)
 Loan 800,000 x 12% x 8/12   = 64,000   (8 months in 20X2)
 Total interest expense 204,000
 Recorded to date (150,000)
 Understatement 54,000
Answer: A. 54,000

Problem 8-20 JASON COMPANY

418,250

Problem 8-21 JUSTINE COMPANY

50,000
975,000
0

Problem 8-22 JONATHAN COMPANY

Problem 8-23 LIZELLE COMPANY