Stanger Corp. purchases a new automobile and takes advantage of a low interest rate loan offered by the manufacturer’s financing division. Stanger buys the car on July 1, 2018, paying $10,000 cash and signing a $48,000, four-year note repayable at $1,050 per month including interest at a nominal rate of 2.4% per annum (0.2% per month). The market rate of interest for similar transactions is 0.3% per month. The first loan payment is due on August 1, 2018. Stanger estimates that the residual value of the car will be $8,500 at the end of its four-year useful life. Depreciation is accounted for monthly on a straight-line basis.

Required:

Prepare journal entries to record:
a. The purchase of the car.
b. Depreciation expense on July 31, 2018.
c. Interest expense on July 31, 2018.
d. The loan payment on August 1, 2018.
e. Interest expense on August 31, 2018.