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Exercise 14-27 Ivanhoe Corp. owes $247,000 to Shamrock Trust. The debt is a 10-year, 12% note due December 31, 2020. Because Ivanhoe Corp. is in
Exercise 14-27 Ivanhoe Corp. owes $247,000 to Shamrock Trust. The debt is a 10-year, 12% note due December 31, 2020. Because Ivanhoe Corp. is in financial trouble, Shamrock Trust agrees to extend the maturity date to December 31, 2022, reduce the principal to $197,000, and reduce the interest rate to 5%, payable annually on December 31 (a) Prepare the journal entries on Ivanhoe's books on December 31, 2020, 2021, 2022. (b) Prepare the journal entries on Shamrock Trust's books on December 31, 2020, 2021, 2022. Click here to view factor tables. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Credit (a) Date Account Titles and Explanation Debit Ivanhoe Corp.'s 2020 2021 2022 (b) Date Account Titles and Explanation Debit Credit Shamrock Trust's 2020 2021 2022 (To record Interest Revenue) (To record maturity of Notes Receivable) Exercise 14-27 Ivanhoe Corp. owes $247,000 to Shamrock Trust. The debt is a 10-year, 12% note due December 31, 2020. Because Ivanhoe Corp. is in financial trouble, Shamrock Trust agrees to extend the maturity date to December 31, 2022, reduce the principal to $197,000, and reduce the interest rate to 5%, payable annually on December 31 (a) Prepare the journal entries on Ivanhoe's books on December 31, 2020, 2021, 2022. (b) Prepare the journal entries on Shamrock Trust's books on December 31, 2020, 2021, 2022. Click here to view factor tables. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Credit (a) Date Account Titles and Explanation Debit Ivanhoe Corp.'s 2020 2021 2022 (b) Date Account Titles and Explanation Debit Credit Shamrock Trust's 2020 2021 2022 (To record Interest Revenue) (To record maturity of Notes Receivable)
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