- June 2: Check # 5002 was used to make a down payment of $33,000.00 on additional computer equipment that was purchased from Royce Computers, invoice number 76542. The full price of the computer was $165,000.00. A five-year note was executed by Byte for the balance. Answer: (132,000)

- June 10: Check # 5003 was used to make a $25,250.00 payment reducing the principal owed on the June 2 purchase of computer equipment from Royce Computers.

(Main Question)

The note payable to Royce Computers  is a five-year note, with interest at the rate of 12 percent annually. Interest expense should be computed based on a 360 day year. [IMPORTANT NOTE: The original note on the computer equipment purchased on June 2 was $132,000.00. On June 10, eight days later, $25,250.00 was repaid. 

Interest expense must be calculated on the $132,000.00 for eight days.

 In addition, interest expense on the $106,750.00 balance of the loan ($132,000.00 less $25,250.00 = $106,750.00) must be calculated for the 20 days remaining in the month of June.]

 

04 04 04 05 05 06 06 07 07 Jun 02 Jun 02 Jun 02 Jun 04 Jun 04 Jun 08 Jun 08 Jun 10 Jun 10 1311 Computer Equip. 1110 Cash 2202 Notes Payable 1211 Office Equip. 2101 Accounts Payable 2101 Accounts Payable 1211 Office Equip. 2202 Notes Payable 1110 Cash Computer Equipment Computer Equipment Computer Equipment Office Equipment Office Equipment Office Equipment return- Inv 98432 Office Equipment return- Inv 98432 Computer Equipment Inv 76542 Computer Equipment Inv 7654: 165,000.00 400.00 80.00 25,250.00 33,000.00 132,000.00 400.00 80.00 25,250.00