Prepare solutions for the following problems Year end is Dec

Prepare solutions for the following problems. Year end is December 31, and Coffee counts exact days in calculating interest. Hand in your work in a Word document and do JEs in standard form. Show calculations for possible part marks. 1 On March 10, 2015, Coffee Corporation receives a three-year, $50,000 note bearing interest at 3% in payment of goods sold The marginal borrowing rate for the customer is 9%. Coffee will receive interest only each March 10. Coffee follows IFRS. Prepare the journal entry to record the sale on March 10 and all of the required journal entries to the final payment

Solution

Issued price = 50000*3% * A/f(9%,3) + 50000 * F/f(9%,3) = 1500 * 2.531 + 50000 * 0.772 = $42396.50 Amortisation schedule: period cash int/ Interest booked discount amort Carrying Value Mar 10 15 42397 Dec 31 15 1221 3105 1884 44281 Mar 10 16 279 742 463 44744 Dec 31 16 1221 3277 2056 46800 Mar 10 17 279 785 506 47305 Dec 31 17 1221 3464 2243 49549 Mar 10 18 279 731 452 50000 Total 7604 Journal Entries: Date Accounts titles Debit $ Credit $ Mar 10 15 Note Receivable 50000 Discount on NR 7603 Sales Revenue 42397 31-Dec Cash 1221 Discount on NR 1884 Interest Revenue 3105 Mar 10 16 Cash 279 Discount on NR 463 Interest Revenue 742 31-Dec Cash 1221 Discount on NR 2056 Interest Revenue 3277 Mar 10 17 Cash 279 Discount on NR 506 Interest Revenue 785 31-Dec Cash 1221 Discount on NR 2243 Interest Revenue 3464 Mar 10 18 Cash 279 Discount on NR 452 Interest Revenue 731 Mar 10 18 Cash 50000 Note Receivable 50000