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Assume on January 1, 2015, the Sutter Company paid $20,000 cash down payment and issued a $100,000, 4-year, zero interest-bearing note to Wrigley, Inc. for
Assume on January 1, 2015, the Sutter Company paid $20,000 cash down payment and issued a $100,000, 4-year, zero interest-bearing note to Wrigley, Inc. for the purchase of new equipment. The prevailing market rate of interest is 8%. Sutter is to pay off the note in four $25,000 installments made at the end of each year (on December 31st). What is the journal entry for this year and next year?
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