On May 1, 2019, Ripley Ltd. purchases a new automobile for $36,000 from the dealer who provides
Question:
On May 1, 2019, Ripley Ltd. purchases a new automobile for $36,000 from the dealer who provides the financing. The three-year, interest-free loan is repayable at $1,000 per month. The market rate of interest for similar transactions is 0.5% per month.
Required:
Prepare journal entries to record:
a. The purchase of the automobile.
b. The accrual of interest and the loan payment at the end of May 2019.
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a To record purchase of automobile 1 Year 1 36000 p...View the full answer
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