1. 2. 3. 4. The county borrows $20,000 to acquire equipment with a useful life of 10 years and no anticipated salvage value. We will repay $5,000 of the principal of the debt at the end of each of the next four years, and the annual interest rate on the debt is 5%. Prepare the year 1 journal entries; this is a full accrual accounting entity. The following is your chart of accounts: Cash Accounts Receivable Prepaid Expenses Inventory Equipment Accumulated Depreciation Notes Payable Accrued Interest Deferred Revenue Revenue Purchases Payroll Benefits Office Supplies Operating Supplies Depreciation Expense Miscellaneous Interest Expense Record the borrowing of the money Record the purchase of the equipment Record the payment of principal and interest at the end of the first year Record the first year depreciation, assuming straight line method