USING ASSET VALUES TO ESTABLISH THE AMOUNT OF A LIABILITY.

Micro Service Company acquired a new truck for one of its service personnel. Because Micro is a good customer, the dealer accepted a 3-year zero-coupon note with a face amount of $47,140 as payment for the truck. The truck had a list price of $39,700, but the dealer would have accepted cash of $38,500 for the truck.

REQUIRED:
1. Record this transaction in Micro’s journal.
2. What is the amount of the addition to Micro’s net liabilities?
3. What is the amount of the addition to Micro’s assets?