PAGE Prepare the appropriate adjusting entry (ies) on December 31, 20xd b) Determine the interest expense reported on the income statement for the year endea c) Determine the Interest expense reported on the income statement for the year ended d) Assume bonds were reacquired by Atlantic Company on July 1,204 a) December 31, 20x1. December 31, 20x2. 60% 1.04 Percent reacquired Reacqulsition price Determine the amount of gain or loss recognized at the time of reacquisition. 5) The Pacific Company purchased a new plece of equipment, as follows Date of purchase: List price of equipment: Terms of payment: April 1, 20d $ 600,000 Down payment at date of purchase: $ 90,000 $120,000 Five equal annual payments irst payment occurring one year from date of purchase) Effective interest rate for Pacific Company (buyer) Effective interest rate for seller 5% 4% Prepare and attach an EXCEL schedule to support your answers. REQUIRED a) Assuming an estimated life of ten years with no estimated salvage value, what amount of depreciation expense (straight-line method) should be recorded by the Pacific Company for the year ended December 31, 20x1? b) Prepare the appropriate entry to recognize interest expense for the year ended December 31, 20x1. (The company uses the effective interest method to record interest expense.) c) The equipment was sold on July 1, 20x8 for a cash amount of: $ 185,000 Determine the gain or loss on the sale of the equipment PAGE Prepare the appropriate adjusting entry (ies) on December 31, 20xd b) Determine the interest expense reported on the income statement for the year endea c) Determine the Interest expense reported on the income statement for the year ended d) Assume bonds were reacquired by Atlantic Company on July 1,204 a) December 31, 20x1. December 31, 20x2. 60% 1.04 Percent reacquired Reacqulsition price Determine the amount of gain or loss recognized at the time of reacquisition. 5) The Pacific Company purchased a new plece of equipment, as follows Date of purchase: List price of equipment: Terms of payment: April 1, 20d $ 600,000 Down payment at date of purchase: $ 90,000 $120,000 Five equal annual payments irst payment occurring one year from date of purchase) Effective interest rate for Pacific Company (buyer) Effective interest rate for seller 5% 4% Prepare and attach an EXCEL schedule to support your answers. REQUIRED a) Assuming an estimated life of ten years with no estimated salvage value, what amount of depreciation expense (straight-line method) should be recorded by the Pacific Company for the year ended December 31, 20x1? b) Prepare the appropriate entry to recognize interest expense for the year ended December 31, 20x1. (The company uses the effective interest method to record interest expense.) c) The equipment was sold on July 1, 20x8 for a cash amount of: $ 185,000 Determine the gain or loss on the sale of the equipment
