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Wildhorse Corporation purchased a computer on December 31, 2016, for $138,600, paying $39,600 down and agreeing to pay the balance in five equal installments of

Wildhorse Corporation purchased a computer on December 31, 2016, for $138,600, paying $39,600 down and agreeing to pay the balance in five equal installments of $19,800 payable each December 31 beginning in 2017. An assumed interest rate of 9% is implicit in the purchase price.

  1. Prepare the journal entry at the date of purchase.
  2. Prepare the journal entry at December 31, 2017, to record the payment and interest (effective-interest method employed).
  3. Prepare the journal entry at December 31, 2018, to record the payment and interest (effective-interest method employed).

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