Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Twin Bridges Hemp Corporation purchased a John Deere combine on January 1 2020, paying $133,334 down and signing a $zero interest Promissory Note Payable. The

Twin Bridges Hemp Corporation purchased a John Deere combine on January 1 2020, paying $133,334 down and signing a $zero interest Promissory Note Payable. The note requires the balance to be paid in five equal installments of $180,380 payable each December 31 beginning 12/31/2020. The market rate of this loan is structured with an interest rate of 11% which reflects THCs credit rating.

Instructions: (Round to even dollar amount.)

(a) Prepare the journal entry at the date of purchase on Jan., 1 2020.

Debit

Credit

(b) Prepare the journal entry at December 31, 2020, to record the first payment.

Debit

Credit

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting

Authors: Jan R. Williams, Susan F. Haka, Mark S. Bettner, Joseph V. Carcello

12th Edition

0071116796, 978-0071116794

More Books

Students also viewed these Accounting questions

Question

Patients are kept waiting two hours for appointments.

Answered: 1 week ago