On January 1, 2018, Lawn in Order provides landscaping services to UMass Lowell in exchange for...
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On January 1, 2018, Lawn in Order provides landscaping services to UMass Lowell in exchange for an $8,000, 3-year noninterest bearing note. Similar notes would have a market interest rate of 6%. Chart out the cash flows of the note: Calculate the PV of the cash flows: Prepare the jourfR entry for Lawn in Order on January 1: Calculate Net Notes Receivable on January 1, 2018 Discount on Notes Notes Receivable Receivable Net Notes Receivable Prepare the appropriate journal entries for December 31, 2018, 2019, and 2020. Post the entries to the T-accounts above as you go and calculate new Net Notes Receivable for each period. December 31, 2018 December 31, 2019 December 31, 2020 Valuation of Notes On January 1, 2018, Lawn in Order provides landscaping services to UMass Lowell in exchange for an $8,000, 3-year noninterest bearing note. Similar notes would have a market interest rate of 6%. Chart out the cash flows of the note: Calculate the PV of the cash flows: Prepare the jourfR entry for Lawn in Order on January 1: Calculate Net Notes Receivable on January 1, 2018 Discount on Notes Notes Receivable Receivable Net Notes Receivable Prepare the appropriate journal entries for December 31, 2018, 2019, and 2020. Post the entries to the T-accounts above as you go and calculate new Net Notes Receivable for each period. December 31, 2018 December 31, 2019 December 31, 2020 Valuation of Notes
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Answer SOLUTION Cash Flows of the note YEAR END CASH FLOWS in 1 Nil 2 Nil 3 8000 Present Value of th... View the full answer
Related Book For
Financial Accounting
ISBN: 978-1259307959
4th edition
Authors: David Spiceland, Wayne Thomas, Don Herrmann
Posted Date:
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