Collins Corporation purchased a computer on December 31, 2014, paying $30,000 down and a further $75,000 payment

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Collins Corporation purchased a computer on December 31, 2014, paying $30,000 down and a further $75,000 payment due on December 31, 2017. An interest rate of 10% is implicit in the purchase price. Collins uses the effective interest method and has a December 31 year end. Collins prepares financial statements in accordance with ASPE.
Instructions
(a) Prepare the journal entry(ies) at the purchase date. (Round to two decimal places.)
(b) Prepare any journal entry(ies) required at December 31, 2015, 2016, and 2017.
(c) Can Collins choose a different method of amortizing any premium or discount on its notes payable? Explain your answer.
Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Intermediate Accounting

ISBN: 978-1118300855

10th Canadian Edition Volume 2

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy

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