on january 1, 2020, your mothers helper inc. purchases equipment with an estimated 6-year useful life by making a $10,500 cash payment and issuing a noninterest-bearing note for $36000 due in two years. The fair value of the equipment is unknown. An 11% annual interest rate is typical of this transaction. The company uses the effective interest method to amortize interest expense and the straight line method to estimate depreciation.

1. Prepare a journal entry to record the purchase on january 1, 2020.

2. prepare the journal entries on december 31, 2020 to record interest expense and depreciation expense

3. assume instead that the company exchanged 1000 shares of its own $5 par value common stock along with $9000 cash for the equipment. At the date of exchange the stock was trading on the market at $30 per share. Prepare the journal entry to record the purchase of the equipment.