ACCT 202; CHAPTER 10; #2

Larkspur Corporation purchased a truck by issuing an $78,100, four-year, noninterest-bearing note to Equinox Inc. The market interest rate for obligations of this nature is 11%.

Calculate the purchase price using any of the three methods (tables, financial calculator, or Excel). (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275.)

Purchase Price = $???

Prepare the journal entry to record the truck purchase. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanations Debit Credit

Vehicles ???

Notes Payable ???