In January 2010, Cordova Company entered into a contract to acquire a new machine for its factory.
Question:
Down payment ....................... $ 55,000
Note payable in four equal annual payments starting in January 2011.. 120,000
600 shares of Cordova preferred stock with a mutually agreed value
of $100 per share (par value $100) ................ 60,000
Fair rate of interest on the non-interest-bearing note 10%
Required
1. Prepare the journal entry to record the acquisition of the machine.
2. How would your answer change, if at all, if the $215,000 cash price were not available?
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Related Book For
Intermediate Accounting
ISBN: 978-0324659139
11th edition
Authors: Loren A. Nikolai, John D. Bazley, Jefferson P. Jones
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