Sabonis Cosmetics Co. purchased machinery on December 31, 2021, paying $50,000 down and agreeing to pay the

Question:

Sabonis Cosmetics Co. purchased machinery on December 31, 2021, paying $50,000 down and agreeing to pay the balance in four equal installments of $40,000 payable each December 31. An assumed interest rate of 8% is implicit in the purchase price.


Instructions

Prepare the journal entries that would be recorded for the purchase and for the payments and interest on the following dates.

a. December 31, 2021.

b. December 31, 2022.

c. December 31, 2023.

d. December 31, 2024.

e. December 31, 2025.

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Related Book For  book-img-for-question

Intermediate Accounting IFRS

ISBN: 9781119607519

4th Edition

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield

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