1. Solvency Limited purchased equipment costing $150,000 on October 1, 2018, by paying 10% down payment in cash and signing an 8%, 9-month note payable for the balance amount. Interest and principle will be paid back together at the end of the note.

Prepare journal entries to record:

a. the purchase of the equipment,

b. the adjusting journal entry to record the accrued interest on December 31,

c. and the payment of the note at maturity along with the interest.