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The Electric Company buys machinery for $500,000 and gives a promissory note to pay dated 2 years from the purchase date. Total interest over the

The Electric Company buys machinery for $500,000 and gives a promissory note to pay dated 2 years from the purchase date. Total interest over the period is 10% and principal are to be repaid at maturity. The life of the asset is also estimated to be two years with no salvage and straight line depreciation is used. The charge to earnings in year 2 resulting from this will be

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