Portuguese, Inc., a truck dealership, sells a truck costing $18,000 to Undervalued Company on January 1, 2009,

Question:

Portuguese, Inc., a truck dealership, sells a truck costing $18,000 to Undervalued Company on January 1, 2009, in exchange for a $40,000 note bearing 9 percent interest.

Required:

1. Prepare the journal entry to record the sale on January 1, 2009.

2. Determine how much interest Portuguese will receive if the note is repaid on July 1, 2009.

3. Provide Portuguese's journal entry to record the cash received to pay off the note and interest on July 1, 2009.

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Cornerstones of Financial and Managerial Accounting

ISBN: 978-0324787351

1st Edition

Authors: Rich Jones, Mowen, Hansen, Heitger

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Question Posted: Jul 23, 2012 03:00 AM

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Portuguese, Inc., a truck dealership, sells a truck costing $18,000 to Undervalued Company on January 1, 2009,

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Cornerstones of Financial and Managerial Accounting

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