On September 1, 2017, Dubai Corp. purchased equipment for $35,400 by signing a two-year note payable with a face value of $35,400 due on September 1, 2019. The going rate of interest for this level of risk was 7%. The company has a December 31 year end.

A) Calculate the cost of the equipment assuming the note is as follows. (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places,e e.g. 5,275.)

1.		An 7% interest-bearing note, with interest due each September 1.
2.		A 2% interest-bearing note, with interest due each September 1.
3.		A noninterest-bearing note.

Cost of the Equipment
1.An 7% interest-bearing note $___________ 2.A 2% interest-bearing note $______________ 3.A noninterest-bearing note $______________

B) Record all journal entries from September 1, 2017, to September 1, 2019, for an 7% interest-bearing note, with interest due each September 1. Ignore depreciation of the equipment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answer to 0 decimal places, e.g. 5,275. Record journal entries in the order presented in the problem.)

Date Account Titles and Explanation Debit Credit

_________________

_________________

Date

_________________

_________________

9/1/18

_________________

_________________

Date

_________________

_________________

9/1/19

_________________

_________________

_________________

_________________

C) Record all journal entries from September 1, 2017, to September 1, 2019, for a 2% interest-bearing note, with interest due each September 1. Ignore depreciation of the equipment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answer to 0 decimal places, e.g. 5,275. Record journal entries in the order presented in the problem.)

D) Record all journal entries from September 1, 2017, to September 1, 2019, for a noninterest-bearing note. Ignore depreciation of the equipment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answer to 0 decimal places, e.g. 5,275. Record journal entries in the order presented in the problem.)