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Cobalt Ceramics, Inc., acquired a manufacturing facility (building) from Nickel Construction Company. Nickel completed construction of the facility on January 1, 2021. In payment for
Cobalt Ceramics, Inc., acquired a manufacturing facility (building) from Nickel Construction Company. Nickel completed construction of the facility on January 1, 2021. In payment for the $6 million lighthouse, Cobalt issued a five-year installment note to be paid in five equal payments at the end of each year. The payments include interest at the rate of 5.4%.
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- Prepare the journal entry for Cobalts purchase of the facility on January 1, 2021.
- Prepare the journal entry for the first installment payment on December 31, 2021.
- Prepare the journal entry for the second installment payment on December 31, 2022.
- What amount will Cobalt report as Notes Payable on its December 31, 2022 balance sheet?
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