Central Valley Construction (CVC) purchased $80,000 of sheet metal fabricating equipment from Buffalo Supply on January 1,20X1. CVC paid $15,000 cash and signed a five-year, 10% note for the remaining $65,000 of the purchase price. The notespecifies that payments of $13,000 plus interest be made each year on the loan's anniversary date. CVC made the required January 1, 20X2,payment but was unable to make the second payment on January 1, 20X3, because of a downturn in the construction industry. At this time,CVC owed Buffalo Supply $52,000 plus $5,200 interest that had been accrued by both companies. Rather than write off the note andrepossess the equipment, Buffalo Supply agreed to restructure the loan as one payment of $50,000 on January 1, 20X5, to satisfy thePage 9-40restructured note. 2. Using the fact pattern presented in Exercise 8-15, prepare journal entries for CVC and Buffalo Supplyon the following dates (for homework, you recorded the journal entries for CVC and Buffalo Supplyon 1/1/2019 [20X3] only):a. 12/31/2019 [203]b. 12/31/2020 [20X4]c. 1/1/2021 [20X5]

An Accounting process starts from collecting the data from Events & transactions and then…

2. Using the fact pattern presented in Exercise 8-15, prepare journal entries for CVC and Buffalo Supply on the following dates (for homework, you recorded the journal entries for CVC and Buffalo Supply on 1/1/2019 [20X3] only): a. 12/31/2019 [20X3] b. 12/31/2020 (20X4] c. 1/1/2021 [20X5]

2. Using the fact pattern presented in Exercise 8-15, prepare journal entries for CVC and Buffalo Supply on the following dates (for homework, you recorded the journal entries for CVC and Buffalo Supply on 1/1/2019 [20X3] only): a. 12/31/2019 [20X3] b. 12/31/2020 (20X4] c. 1/1/2021 [20X5]

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 16P

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