question #2

On Jan 1, your company purchased equipment for $125,000. You believe that the equipment will last for 5 years and you prefer the double declining balance method of depreciation. In addition, your company borrowed $160,000 from the bank, signing a 1 year 9% interest note. On January 1 the following year, you sell the equipment for $100,000. What journal entries would you prepare to:

Record the purchase?

Record the note?

Record the sale?