On January 1, 2021, the Montgomery Company agreed to purchase a building by making six payments. The
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On January 1, 2021, the Montgomery Company agreed to purchase a building by making six payments. The first three are to be $25,000 each, and will be paid on December 31, 2021, 2022, and 2023. The last three are to be $40,000 each and will be paid on December 31, 2024, 2025, and 2026. Montgomery borrowed other money at a 10% annual rate.
Required:
1. At what amount should Montgomery record the note payable and corresponding cost of the building on January 1, 2021?
2. How much interest expense on this note will Montgomery recognize in 2021?
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Related Book For
Intermediate Accounting
ISBN: 978-1260481952
10th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
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