Answered step by step
Verified Expert Solution
Question
1 Approved Answer
20. The journal entry to record the receipt of a non-interest bearing note in exchange for a good or service should include a: A. Debit
20. The journal entry to record the receipt of a non-interest bearing note in exchange for a good or service should include a: A. Debit to Note Receivable for an amount equal to the present value of the note. B. Debit to Note Receivable for the face value of the note (the amount to be received in the future). C. Debit to Discount on note receivable for the amount of interest to be earned on the note in the future. D. Credit to Discount on note receivable for the face value of the note receivable. E. None of the above. 21. Montana Mining Co. (MMC) paid $200 million for the right to explore and extract rare metals from land owned by the state of Montana. To obtain the rights, MMC agreed to restore the land to a suitable condition for other uses after its exploration and extraction activitics. MMC incurred exploration and development costs of $60 million on the project. MMC has a credit-adjusted risk free interest rate of 7% (PV factor-0.8 1630). It estimates the possible cash flows for restoring the land, three years after its extraction activities begin, as follows: Cash Outflow S 10 million S 30 million Probability 60% 40% The asset retirement obligation (rounded) that should be recognized by MMC at the beginning of the extraction activities is: A) $8.2 million. B) $14.7 million. C) $18 million. D) S30 million. 22. Juliana Corporation purchased all of the outstanding stock of Caldwell Inc., paying $2,700,000 cash. Juliana assumed all of the liabilities of Caldwell. Book values and fair values of acquired assets and liabilities were: Book Value Fair Value Current assets (net) S 420,000 S 450,000 2,250,000 600,000 Property, plant,& equip. (net) 1,600,000 500,000 Liabilities Juliana would record goodwill of A) S1,180,000 B) 5600,000 C) $880,000. D) $100,000
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started