Question
On January 1, 2019, Allen Inc. acquired a piece of machinery by issuing a 3-year noninterest bearing note payable. Allen Inc. recorded the following entry:
On January 1, 2019, Allen Inc. acquired a piece of machinery by issuing a 3-year noninterest bearing note payable. Allen Inc. recorded the following entry:
| Dr. | Cr. | |
| Machinery | 158,766 | |
| Discount on Note Payable | 41,234 | |
| Note Payable | 200,000 |
The implicit interest rate for this transaction is 8%. What is the amount of interest recognized in 2020?
$0
$12,701
$13,717
$12,225
$16,000
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Margins Of Error In Accounting
Authors: D. Myddelton
1st Edition
0230219918, 9780230219915
