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.
Step by Step Answer:
a December 31 2021 Debit Machinery Asset 90000 Credit Cash 50000 Credit Notes Payab...View the full answer
Intermediate Accounting IFRS
ISBN: 9781119607519
4th Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
Related Video
A journal entry is an act of keeping or making records of any transactions either economic or non-economic. Transactions are listed in an accounting journal that shows a company\'s debit and credit balances. The journal entry can consist of several recordings, each of which is either a debit or a credit
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