On January 1, 2007 the Sanders Corporation purchased equipment having a fair value of $68,301.30 by issuing

Question:

On January 1, 2007 the Sanders Corporation purchased equipment having a fair value of $68,301.30 by issuing a non-interest-bearing, $100,000, four-year note due December 31, 2010.

Required

Prepare the journal entries to record

(1) The purchase of the equipment,

(2) The annual interest charges over the life of the note, and

(3) The repayment of the note.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...