Question
Abbot Corp. issued a $270,000, three-year, zero-interest-bearing note payable to Athabasca Corp. for equipment on April 30, 2020. Abbot would normally pay interest at 6%.
Abbot Corp. issued a $270,000, three-year, zero-interest-bearing note payable to Athabasca Corp. for equipment on April 30, 2020. Abbot would normally pay interest at 6%. Abbot has a December 31 year-end and will repay the note with three equal yearly payments of $90,000. Abbot Corporation follows IFRS.
Instructions
Prepare the following journal entries for Abbot Corporation:
- Record the note
- December 31, 2020 interest accrual
- April 30, 2021 payment
- December 31, 2021 interest accrual
- April 30, 2022 payment
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Introduction To Financial Accounting
Authors: Charles T Horngren, John A Elliott
9th Edition
0131479725, 978-0131479722
