Prepare the journal entry at the end of the first year to record the payment and interest,
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Question:
Prepare the journal entry at the end of the first year to record the payment and interest, assuming that the company employs the effectiveinterest method. Round answers to decimal places, eg Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.
Account Titles and Explanation
Debit
Credit
Equipment
Discount on Notes Payable
Notes Payable
Current Attempt in Progress
Swifty Inc. has decided to purchase equipment from Central Michigan Industries on January to expand its production capacity to meet customers' demand for its.product. Swifty issues an $year, zerointerestbearing note to Central Michigan for the new equipment when the prevailing market rate of interest for obligations of this nature is The company will pay off the note in five $ installments due at the end of each year over the life of the note.
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