As chief accountant for a small business, you must determine how to record the acquisition of a
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Question:
As chief accountant for a small business, you must determine how to record the acquisition of a new piece of equipment. The equipment is semi-custom so there is no direct comparable equipment, but the manufacturer estimates the value of the equipment to be $385,000. In order to purchase the equipment, you sign 4 year, $380,000 note with an interest rate of 3.5%. Since you are a small company, there are no comparable bonds, but you have a BBB bond rating (see Footnote 1). The transaction took place on March 16, 2018.
What is the journal entry to record the acquisition of the equipment?
Related Book For
College Accounting
ISBN: 978-1111528126
11th edition
Authors: Tracie Nobles, Cathy Scott, Douglas McQuaig, Patricia Bille
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