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    mkight47's Avatar
    mkight47 Posts: 1, Reputation: 1
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    #1

    May 26, 2014, 04:25 PM
    Whiley Company issued a $100,000 five year
    [FONT=MeridienLTStd-Roman][SIZE=1][FONT=MeridienLTStd-Roman][SIZE=1]Whiley Company issued a $100,000, fi ve-year, 10 percent note to Security Company
    on January 2, 2009. Interest was to be paid annually each December 31. The stated
    rate of interest refl ected the market rate of interest on similar notes.
    Whiley made the fi rst interest payment on December 31, 2009. Due to fi nancial
    diffi culties, the fi rm was unable to pay any interest on December 31, 2010.
    Security agreed to the following terms:
    1. The $100,000 principal would be payable in fi ve equal installments, beginning
    December 31, 2011.
    2. The accrued interest at December 31, 2010, would be forgiven.
    3. Whiley would be required to make no other payments.
    Because of the risk associated with the note, it has no determinable fair value.
    The note is secured by equipment having a fair value of $80,000 at December 31,
    2010. The present value of the fi ve equal installments discounted at 10 percent
    is $75,815

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    ma0641's Avatar
    ma0641 Posts: 15,675, Reputation: 1012
    Uber Member
    		  
    #2

    May 26, 2014, 06:20 PM
    So far you have only made HOMEWORK statements, not questions. We do not do your homework for you.
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