Question: On december 28, 20x1, company purhcased a used backhoe for resale at an agreed price of $40,000. terms of purchase: 1: $10,000 down payment

On december 28, 20x1, company purhcased a used backhoe for resale at 

On december 28, 20x1, company purhcased a used backhoe for resale at an agreed price of $40,000. terms of purchase: 1: $10,000 down payment 2: note payable face amount = $30,000. Maturity date is 12/28/20x3 Give the journal entries that Evans should have made for 20x1 and 20x2. Also give the entries that should be made through the maturity date, 12/28/20x3. Ignore materiality - i.e., record interest for short periods, e.g., a few days at year end. When calculating interest, use 365 days. You may not use the straight-line method. Assume a discount rate of 12%.

Step by Step Solution

3.38 Rating (154 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

Answer Note payable PV factor of 12 2 year Present value Date Dec 28 20X1 Dec 28 20X2 Dec 28 20X3 Jo... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!