On September 1, 2020, Blossom Ltd. purchased equipment for $44,100 by signing a two-year note payable with a face value of $44,100 due on September 1, 2022. The going rate of interest for this level of risk was 8%. The company has a December 31 year end. (The tables in this problem are to be used as a reference for this problem.) Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1. Calculate the cost of the equipment, where necessary using any of the three methods (tables, financial calculator, or Excel), assuming the note is as follows: (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to o decimal places, e.g. 5,275.) 1. 2. 3. An 8% interest-bearing note, with interest due each September 1. A 2% interest-bearing note, with interest due each September 1. A non-interest-bearing note. Cost of the Equipment 1. An 8% interest-bearing notes 2. A 2% interest-bearing notes 3. A non-interest-bearing note Record all journal entries from September 1, 2020, to September 1, 2022, for an 8% 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 o for the amounts. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit 9/1/20 Equipment Notes Payable 12/31/20 Interest Expense Interest Payable 9/1/21 Interest Payable Interest Expense Cash 12/31/21 Interest Expense Interest Payable Interest Payable Interest Expense Notes Payable Cash Record all journal entries from September 1, 2020, to September 1, 2022, 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 o 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 9/1/20 - Equipment Notes Payable 12/31/20 Interest Expense Notes Payable Interest Payable 9/1/21 Interest Payable Interest Expense Notes Payable Cash 12/31/21 Interest Expense Notes Payable Interest Payable 9/1/22 Interest Payable Interest Expense Notes Payable Cash Record all journal entries from September 1, 2020, to September 1, 2022, for a non-interest-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 o for the amounts. Round answer to O decimal places, e.g. 5,275. Record journal entries in the order presented in the problem.) Account Titles and Explanation Debit Credit Date 9/1/20 Equipment Notes Payable 12/31/20 $ Interest Expense Notes Payable 9/1/21 Interest Expense Notes Payable 12/31/21 Interest Expense Notes Payable 9/1/22 Interest Expense Notes Payable (To record interest expense) 9/1/22 Notes Payable Cash (To record note repayment)
