New theater equipment was purchased on July 1, 2002. Terms of purchase:

And initial cash payment plus a non-bearing interest note payable Where issued in exchange for the new theater equipment:

Initial cash payment 20,000

Maturity value of a non-interest-bearing note 140,000

Term of note: 5

Annual interest rate 8%

Depreciation of new theater equipment as my life is 12 and residual value is 15%.

How can I record purchase of a new equipment with this note payable?

And how can I record appreciation expense on theater equipment?