(a)At the beginning of current year, Christine Company signed an agreement to operate as a franchise of Ace Company for an initial franchise fee of $12,000. Christine Company paid $4,000 down and agreed to pay the balance in four equal annual payments of $2,000 at the end of each year. Christine Company can borrow at 14% for a loan of this type. The present value factors at 14% are as follows: Present value of 1 at 14% for four periods = 0.59; Present value of an ordinary annuity of 1 at 14% for four periods = 2.91. What is the acquisition cost of the franchise?

(b)Kanye Corp. issued $250,000 face value bonds on January 1, 20x8. The bonds, which will mature on January 1, 20x11 pay interest of 12% every December 31. The bonds are issued to yield 10% interest. What was the issue price of the bonds? What is the carrying amount of the bonds on December 31, 20x9

(c)On January 1, 20x7, Gapple Corp. purchased land by issuing $1 million non-interest bearing note payable after 3 years. The company also purchased an equipment by issuing a non-interest promissory note that requires three annual installment payments of $100,000 every December 31. The interest rate charged on the notes is 10%. The present value of $1 at 10% for 3 periods is 0.75131 while the present value of an ordinary annuity of $1 at 10% for 3 periods is 2.4868.

What is the carrying value of the $1 million face value note at December 31, 20x7?

What is the carrying value of the $1 million face value note at December 31, 20x8?

(d) Bavin Co. developed a new machine for manufacturing baseballs. Because the machine is considered very valuable, the entity had it patented.

The following expenditures were incurred in developing and patenting the machine:

Purchase of special equipment to be used solely for development of new machine $900,000

Research Salaries and fringe benefits for engineers and scientists $100,000

Cost of testing prototype $125,000

Legal Cost for filing of patent $75,000

Fees paid to government patent office $25,000

Drawings required by patent office to be filed with patent application $20,000

What amount should be capitalized as cost of patent? What amount of research and development cost should be expensed in the current year?

(e)Melania Company reported the following data at year-end: Franchise - $1,000; Computer software - $1,500; Deferred charges - $100; Patent - $2,500; Customer list purchased - $500; Copyright - $700; Deposit with advertising agency to promote goodwill - $400; Bond sinking fund - $1,300; Goodwill - $4,000; Trademark - $900; Research and development cost - $2,000. What total amount should be reported as intangible assets?

(f)An entity issued 5,000, 5-year bonds, face amount of $1,000 each at 110. The bonds contain a conversion privilege that provides for an exchange of a $1,000 bond for 10 equity shares with par value of $100. It is reliably determined that the bonds would sell only at 95 without the conversion privilege. How much would be credited to bonds payable?

(g) FRUIT Company developed a trademark to distinguish its products from those of the competitors. Marketing research to study consumer tastes - $200,000; Design cost of trademark - $750,000; Legal fee of registering trademark - $75,000; Advertising to establish recognition of trademark - $100,000; Registration fee with Intellectual Property Office - $25,000. What amount should be capitalized as cost of trademark?

(h)On March 31, 20x7, High Co issued for $1,774,000, P2,000,000 face amount of its 10%, P1,000,000 bonds. The bonds were issued to yield 12%. The bonds are dated July 1, 20x7 and mature on July 1, 20x10. Interest is payable annually on July 1. High uses the interest method to amortize the bond discount. Determine the interest expense of the bonds on December 31, 20x8.

What are the correct procedures to be undertaken? What are the best possible answer at each situation? Please provide an informative solutions