At January 1, 2011, Brant Cargo acquired equipment by issuing a five-year, $150,000 (payable at maturity), 4%

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At January 1, 2011, Brant Cargo acquired equipment by issuing a five-year, $150,000 (payable at maturity), 4% note. The market rate of interest for notes of similar risk is 10%.

Required:

1. Prepare the journal entry for Brant Cargo to record the purchase of the equipment.

2. Prepare the journal entry for Brant Cargo to record the interest at December 31, 2011.

3. Prepare the journal entry for Brant Cargo to record the interest at December 31, 2012.

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Intermediate Accounting

ISBN: 978-0077400163

6th edition

Authors: J. David Spiceland, James Sepe, Mark Nelson

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Question Posted: Jul 05, 2013 06:52 AM

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At January 1, 2011, Brant Cargo acquired equipment by issuing a five-year, $150,000 (payable at maturity), 4%

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Requirement 1 Interest 6000 x 379079 22745 Principal 150000 x ...View the full answer

Intermediate Accounting

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