On January 1, 2022, Sappi bought a piece of equipment by signing a non-interest bearing $ 100,000, 1-year note. The face value of the note includes the price of the equipment and the interest. The effective interest rate is an annual rate of 18%, and the note is to be paid in four $ 25,000 quarterly installments on March 31, June 30, September 30, and December 31. The price of the equipment is the present value of the four payments discounted at the effective rate. Prepare all journal entries to include the payments and the interest.

Answer rating: 100% (QA)

On January 1 2022 Debit Equipment for 96904 Credit Note Payable for 100000 On ... View the full answer