LCD Industries purchased a supply of electronic components from Entel Corporation on November 1, 2011. In payment

Question:

LCD Industries purchased a supply of electronic components from Entel Corporation on November 1, 2011. In payment for the $24 million purchase, LCD issued a 1-year installment note to be paid in equal monthly payments at the end of each month. The payments include interest at the rate of 12%.

Required:

1. Prepare the journal entry for LCD's purchase of the components on November 1, 2011.

2. Prepare the journal entry for the first installment payment on November 30, 2011.

3. What is the amount of interest expense that LCD will report in its income statement for the year ended December 31, 2011?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...