In January 2019, Cordova Company entered into a contract to acquire a new machine for its factory. The machine, which has a cash price of $280,000, was paid for as follows: Down payment $130,000 Note payable in 4 equal annual payments starting in January 2020 $120,000 500 shares of Cordova preferred stock with a mutually agreed value of $100 per share (par value $100) $50,000 Fair rate of interest on the non-interest-bearing note 10% GENERAL JOURNAL DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT 1 2 3 4 5 6
In January 2019, Cordova Company entered into a contract to acquire a new machine for its factory. The machine, which has a cash price of $280,000, was paid for as follows: Down payment $130,000 Note payable in 4 equal annual payments starting in January 2020 $120,000 500 shares of Cordova preferred stock with a mutually agreed value of $100 per share (par value $100) $50,000 Fair rate of interest on the non-interest-bearing note 10% GENERAL JOURNAL DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT 1 2 3 4 5 6
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
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 1MC
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In January 2019, Cordova Company entered into a contract to acquire a new machine for its factory. The machine, which has a cash price of $280,000, was paid for as follows:
Down payment | $130,000 |
Note payable in 4 equal annual payments starting in January 2020 | $120,000 |
500 shares of Cordova |
$50,000 |
Fair rate of interest on the non-interest-bearing note | 10% |
GENERAL JOURNAL
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