Cardinals Corporation purchased a computer on December 31, 2019, for $105,000, paying $30,000 down and agreeing to pay the balance in five equal installments of $15,000 payable each December 31 beginning in 2020. An assumed interest rate of 10% is implicit in the purchase price. Instructions (Round to two decimal places.) a. Prepare the journal entry(ies) at the date of purchase. b. Prepare the journal entry(ies) at December 31, 2020, to record the payment and interest (effective-interest method employed). c. Prepare the journal entry(ies) at December 31, 2021, to record the payment and interest (effective-interest method employed)
Cardinals Corporation purchased a computer on December 31, 2019, for $105,000, paying $30,000 down and agreeing to pay the balance in five equal installments of $15,000 payable each December 31 beginning in 2020. An assumed interest rate of 10% is implicit in the purchase price. Instructions (Round to two decimal places.) a. Prepare the journal entry(ies) at the date of purchase. b. Prepare the journal entry(ies) at December 31, 2020, to record the payment and interest (effective-interest method employed). c. Prepare the journal entry(ies) at December 31, 2021, to record the payment and interest (effective-interest method employed)
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 12P: Hamlet Corporation purchases computer equipment at a price of 100,000 on January 1, 2019, paying...
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Cardinals Corporation purchased a computer on December 31, 2019, for $105,000, paying $30,000 down and agreeing to pay the balance in five equal installments of $15,000 payable each December 31 beginning in 2020. An assumed interest rate of 10% is implicit in the purchase price.
Instructions
(Round to two decimal places.)
a. Prepare the
b. Prepare the journal entry(ies) at December 31, 2020, to record the payment and interest (effective-interest method employed).
c. Prepare the journal entry(ies) at December 31, 2021, to record the payment and interest (effective-interest method employed)
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