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Sandhill Inc. decided to purchase equipment from Central Ontario Industries on January 2 , 2 0 2 3 , to expand its production capacity to

Sandhill Inc. decided to purchase equipment from Central Ontario Industries on January 2,2023, to expand its production capacity to meet customers demand for its product. Sandhill issued a $906,000,6-year, noninterest-bearing note to Central Ontario for the new equipment when the prevailing market interest rate for obligations of this nature was 11%. The company will pay off the note in 6 $151,000 instalments due at the end of each year of the notes life.

Prepare the journal entries at the end of the first year to record the payment of principal and interest, assuming that the company uses the effective interest method. For Jan 2, there are 3 titles for the entry.


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