Question
Company A purchased equipment for $100,000 from Company B on Jan. 1, 2015. Company A paid $20,000 cash and signed a 5-yr 10 percent note
Company A purchased equipment for $100,000 from Company B on Jan. 1, 2015. Company A paid $20,000 cash and signed a 5-yr 10 percent note for the remainder ($80,000). The note specifies that payments of $12,000 plus interest is due each year on Jan. 1st, Company A made the required payment on Jan. 1st, 2016 but failed to make the payment in 2017.
At this time Company A owed Company B the payment plus interest that had been accrued by both companies.
Instead of writing off the note and repossessing the equipment, Company B agreed to restructure the loan as one payment of $60,000 on Jan. 1, 2019, to satisfy the restructed note
Prepare (3) Journal Entry for Jan 1st 2017, 2018, 2019
(present value of payment due in 2 yrs)
thanks, will give thumbs up too
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