User Account

All Pages

How bmo agrees to reduce the principal balance

Assignment Help Accounting Basics
Reference no: EM132473499

Excel Corporation is experiencing financial difficulty and has met with their creditor (BMO) to explore their options related to a $2 million, 8% note payable that is outstanding. The note was issued on September 1, 2019 when the market rate of interest was 8%. There are two years remaining on the note and the current market rate of interest is 10%. Excel and BMO prepare financial statements in accordance with IFRS.

For each of the following independent situations prepare the journal entry that both Excel and BMO would on their books.

Question A) BMO agrees to modify the terms so that Excel is not paying any interest on the note for the remaining two years

Question B) BMO agrees to reduce the principal balance to $1,875,000 and requires interest only payments for the next two years at a rate of 9%.

Question C) Explain how your answer for b would be different if Excel used ASPE.

Reference no: EM132473499

Questions Cloud

How much is remaining on the lease at december : How much is remaining on the lease at December 31st, 2013?
When will their mortgage be paid off : What amount is remaining on their mortgage on December 31st, 2013?
Is global warming taking place in your considered opinion : After reviewing these exemplars of evidence and assessment on GHG emissions, rising temperatures, and melting polar regions and glaciers, create an initial.
Degree of operating leverage at the given level of output : Using the following information: initial fixed asset investment = $575,000; straight-line depreciation to zero over the four-year life; zero salvage value
How bmo agrees to reduce the principal balance : BMO agrees to reduce the principal balance to $1,875,000 and requires interest only payments for the next two years at a rate of 9%.
What is the time weighted rate of return : Ronald has a security that returned +8%, -2%, +6% and +12% over the last four periods. What is the time weighted rate of return?
Determine the amount of accumulated depreciation : Determine the amount of depreciation expense that would appear on the Year 1 and Year 2 income statements. Determine the amount of accumulated depreciation
What is the holding period return for investment : Dror purchases a stock at $40, receives a $3.00 dividend, and later sells the stock for $44. What is the holding period return for this investment?
Disability insurance through her employer : Nancy owns a home and an automobile. She has property insurance, but does not have disability insurance through her employer.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd