On January 1, 2020 The Crosslist company acquires a piece of equipment. The list price is $480,000. Crosslist pays $70,000 and issues a note payable for the remainder. The principal of the note is due on January 1, 2025, and annual interest of 4% is due every December 31st. Crosslist incremental borrowing rate is 6%, while the supplier's incremental borrowing rate is 7%.

The equipment useful life is 10 years, and its residual value is $60,000. Crosslist uses the straight-line method of depreciation.

Ignore decimals in your calculations, do not round.

Required

1- Assuming Crosslist is a public company, prepare the required journal entries from January 1, 2020 to December 31, 2021.

2-Assuming Crosslist is a private company and chooses to use the straight-line method to account for interest expense, calculate the interest expense to be recorded on December 31, 2020 (no journal entry required).