ABC Company purchased a new truck in exchange for a 3-year non-interest bearing note with a maturity value of $80,000. The market rate of interest for similar notes is 6% compounded annually.

(a) What is the historical cost of the truck to ABC Company? Journalize purchase of Truck.

(b) Suppose that the $80,000 note paid interest of 2% at the end of each year for three years. In that case, what is the historical cost of the truck? Journalize purchase of Truck.