Chart of Accounts:

Hemingway Company purchases equipment by issuing a 7-year, $420,000 non-interest-bearing note, when the market rate for this type of note is 7%. Hemingway will pay off the note with equal payments to be made at the end of each year. Required: Prepare the journal entry to record Hemingway's acquisition of the equipment. Prepare the journal entry to record Hemingway's acquisition of the equipment on January 1. General Journal Instructions PAGE 10 GENERAL JOURNAL DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT ASSETS REVENUE 111 Cash 411 Sales Revenue 121 Accounts Receivable 141 Inventory EXPENSES 500 Cost of Goods Sold 152 Prepaid Insurance 181 Equipment 511 Insurance Expense 198 Accumulated Depreciation 512 Utilities Expense 521 Salaries Expense 532 Bad Debt Expense LIABILITIES 540 Interest Expense 211 Accounts Payable 221 Notes Payable 222 Discount on Notes Payable 231 Salaries Payable 250 Unearned Revenue 261 Income Taxes Payable 541 Depreciation Expense 559 Miscellaneous Expenses 910 Income Tax Expense EQUITY 311 Common Stock 331 Retained Earnings