Example 14 5: JN Min Corporation, a calendar-year company borrowed years n e .ai qua er y The fiscal year ends on December 31. The current market rate is 12%. Interest is compounded quarterly N Min prepares quarterly financial statements. Prepare the amortization table for the note and the journal entries for 2015. 2 1,000,000 on August 15,2015. The note specifies an 8% terest rateands er th e 4 N IVY PV PMT FV Excel Formula Given 12 3.00% 20,000-1,000,000 10 Solve for PV 900,460 PV 0.03,12.-20000-1000000 When we issue this notes payable, we promise to pay: (1) Cash Interest every quarter-Face Value of the Notes Payable x Qaurterly stated rate (2) Principal of $1,000,000 at the end of the 3rd year Every Quarter we will pay cash interest 16 17 Annual Market Interest Rate Quarterly Market Interest Rate FV 19 Annual Stated Interest Rate Quarterly Stated Interest Rate 8% Sheetl 14 (2) Principal of $1,000,000 at the end of the 3rd year 15 Every Quarter we will pay cash interest 17 Annual Market Interest Rate Quarterly Market interest Rate 12% 19 Annual Stated Interest Rate 20 21 Years Quarterly Stated Interest Rate FV 8% Number of Quarters Face Value of the Notes Payable The notes payable is issued at a discount of 24 Present Value of the Notes Payable - Face Value - Present Value of the Notes Payable Prior Carrying Value x Quarterly Market Interest Rate Example 14 5: JN Min Corporation, a calendar-year company borrowed years n e .ai qua er y The fiscal year ends on December 31. The current market rate is 12%. Interest is compounded quarterly N Min prepares quarterly financial statements. Prepare the amortization table for the note and the journal entries for 2015. 2 1,000,000 on August 15,2015. The note specifies an 8% terest rateands er th e 4 N IVY PV PMT FV Excel Formula Given 12 3.00% 20,000-1,000,000 10 Solve for PV 900,460 PV 0.03,12.-20000-1000000 When we issue this notes payable, we promise to pay: (1) Cash Interest every quarter-Face Value of the Notes Payable x Qaurterly stated rate (2) Principal of $1,000,000 at the end of the 3rd year Every Quarter we will pay cash interest 16 17 Annual Market Interest Rate Quarterly Market Interest Rate FV 19 Annual Stated Interest Rate Quarterly Stated Interest Rate 8% Sheetl 14 (2) Principal of $1,000,000 at the end of the 3rd year 15 Every Quarter we will pay cash interest 17 Annual Market Interest Rate Quarterly Market interest Rate 12% 19 Annual Stated Interest Rate 20 21 Years Quarterly Stated Interest Rate FV 8% Number of Quarters Face Value of the Notes Payable The notes payable is issued at a discount of 24 Present Value of the Notes Payable - Face Value - Present Value of the Notes Payable Prior Carrying Value x Quarterly Market Interest Rate
