Question
Please complete the journal entries for both questions. 1. Caterpillar sells a large piece of custom-made equipment to the state of North Carolina for $300,000
Please complete the journal entries for both questions.
1. Caterpillar sells a large piece of custom-made equipment to the state of North Carolina for $300,000 on July 1, 2019. As part of the sales agreement, Caterpillar agrees to accept payment from the state on December 31, 2020. The firm's normal discount rate (5%) is more reliable than caterpillar's estimated cash value of the equipment ($270,000).
Provide the missing Journal information in the table below.
Answer:
Account Name Entry Amount DR/CR/NA
7/1/20 Discount on Notes Receivable $
Notes Receivable $
Sales Revenue $
12/31/20 Discount on Notes Receivable $
Interest Revenue $
12/31/21 Cash $
Discount on Notes Receivable $
Interest Revenue $
Notes Receivable $
5. At the end of 2020, Hornets Company did not own any debt or equity investments, On January 1st, 2021. Hornets Company purchased newly issued 4- year, 6% annual coupon General Electric bands as an available for sale investment. The purchase price was 103 for each $1,000 bond. Hornets acquired 400 of these bonds. The fair value of each bond was 102.5 on December 31, 2021. Hornets company sold 220 of the bonds at 1015 on March 1, 2022. Use the following amortization table for each bond to answer the question that follow. January 1, 2021 1,030.00 December 31, 2021 60.00 53.06 -6.94 1,023.06 December 31,2022 60.00 52.70 -7.30 1,015.75 Provide the fair value adjustment Journal entry information for December 31st, 2021 and sale on March 1st 2022 and the table below. Answer: Account Name Entry Amount DR/CR/NA 12/31/21 fair value adjustment $ UHGL -Income $ 3/1/2022 Cash $ Debt Investment $ Fair Value Adjustments Gain or Loss on Sale Interest Revenue $ 5. At the end of 2020, Hornets Company did not own any debt or equity investments, On January 1st, 2021. Hornets Company purchased newly issued 4- year, 6% annual coupon General Electric bands as an available for sale investment. The purchase price was 103 for each $1,000 bond. Hornets acquired 400 of these bonds. The fair value of each bond was 102.5 on December 31, 2021. Hornets company sold 220 of the bonds at 1015 on March 1, 2022. Use the following amortization table for each bond to answer the question that follow. January 1, 2021 1,030.00 December 31, 2021 60.00 53.06 -6.94 1,023.06 December 31,2022 60.00 52.70 -7.30 1,015.75 Provide the fair value adjustment Journal entry information for December 31st, 2021 and sale on March 1st 2022 and the table below. Answer: Account Name Entry Amount DR/CR/NA 12/31/21 fair value adjustment $ UHGL -Income $ 3/1/2022 Cash $ Debt Investment $ Fair Value Adjustments Gain or Loss on Sale Interest Revenue $Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started