Question
On January 1, 2022, Mission Company agreed to buy some equipment from Anna Company. Mission Company signed a non-interest-bearing note, agreeing to pay Anna Company
On January 1, 2022, Mission Company agreed to buy some equipment from Anna Company. Mission Company signed a non-interest-bearing note, agreeing to pay Anna Company the entire $500,000 for the equipment on December 31, 2024. The market rate of interest for this note was 10%.
Required:
- Prepare the journal entry Mission Company would record on January 1, 2022 related to this purchase. (Round all answers to whole dollars)
2. Prepare the December 31, 2022, adjusting entry to record interest expense related to the note for the first year. Assume that no adjusting entries have been made during the year.
3. Prepare the December 31, 2023, adjusting entry to record interest expense related to the note for the second year. Assume that no adjusting entries have been made during the year.
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Horngren S Financial And Managerial Accounting The Managerial Chapters RENTAL EDITION
Authors: Miller-Nobles
1st Edition
0136503748, 978-0136503743
