Leases and Goodwill Homework Problem 17 Consider Dezie's Company Accounts Receivables $300,000 Accounts Payable Inventory 200,000 Note Payable Fixed Assets $900,000 Owners' Equity Accum Deprec 100,000 800,000 Common Stock Retained Earnings 250,000 400,000 200,000 450,000 Hayley's Company will buy this company (Dezie's) for $1,200,000. Hayley estimates that the Accounts Receivables are worth $270,000, the Inventory is worth $220,000 and the Fixed Assets are worth $800,000. The Note Payable is interest only at 10% with exactly ten years left before the principle is due. Current interest rates are 8%. Everything else is worth its book value. Prepare the journal entry made by Hayley to record the purchase. Problem 2 On January 1, Joey, Inc. buys equipment for $10,000. Terms are 10% down the rest in 3 equal annual payments which include interest at 6%. (6% is what the bank would charge you.) The payments start December 31. Prepare an amortization schedule and all the journal entries for each year. Redo Joey with 10% down interest only payments of 2% for 3 years. Prepare an amortization schedule and all the journal entries for each year. Redo Joey with 10% down and 3 equal payments that include interest at 2%. Prepare an amortization schedule and all the journal entries for each year. Problem 38 This is data from the Marjean Company: Accounts Receivable $100,000 Inventory 80,000 Fixed Assets $600,000 Accum Deprec 200,000 400,000 Accounts Payable Note Payable Owners' Equity 30,000 150,000 400,000 Burden Co. will buy Marjean Company for $1,200,000. They estimate the Accounts Receivable are worth $ 96,000, the Inventory is worth $90,000 and the Fixed Assets are worth $800,000. The Note Payable is interest only at 10% with the principal due 5 years from today. Current interest is 12%. Everything else is worth its book value. Prepare the journal entry for the purchase on Burden Co.'s books