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Prepare the note amortization schedule

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Question - On January 1, 2021, Pêcheuse Ltee sold a fishing vessel to a customer in exchange for a five year €450,000 promissory note with an annual interest rate of 5%. Interest only payments are due SEMI-ANNUALLY, beginning on June 30, 2021. The market rate for an equivalent loan to this customer would have been 8%*. Pêcheuse Ltee uses IFRS, has a Dec 31 year end, and prepares adjusting entries annually.

a) Using the present value tables in the textbook Calculate the amount of revenue to be recorded on January 1st 2021 by Pêcheuse Ltee for the sale of the fishing boat.

b) Prepare the journal entries for Pêcheuse Ltee. at Jan 1, 2021, June 30, 2021, and Dec 31, 2021. (Show all calculations.)

c) Prepare the note amortization schedule. Be sure to show the all the semi-annual interest payments and the payment of the note on Jan 1, 2026.

Reference no: EM132927234

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