pter $10$ Homework

Exercise $10-9($Algo$)$ Acquisition cost; noninterest$-$bearing note $[$LO$10-3]$

On January $1,2024,$ Byner Company purchased a used tractor. Byner paid $$5,000$ down and signed a noninterest$-$bearing note requiring $$32,000$ to be paid on December $31,2026.$ The fair value of the tractor is not determinable. An interest rate of $10\%$ properly reflects the time value of money for this type of loan agreement. The company's fiscal year$-$end is December $31.$

Note: Use tables, Excel, or a financial calculator. $($FV of $$1.$ PV of $$1.$ FVA of $$1.$ PVA of $$1.$ FVAD of $$1$ and PVAD of $$1)$

Required:

Prepare the journal entry to record the acquisition of the tractor.

How much interest expense will the company include in its $2024$ and $2025$ income statements for this note?

What is the amount of the liability the company will report in its $2024$ and $2025$ balance sheets for this note?

Complete this question by entering your answers in the tabs below.

Req $1$

Req $2$ and $3$

Prepare the journal entry to record the acquisition of the tractor.

Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field. Do not round intermediate calculations. Round your answers to the nearest whole dollars.

$\backslash$table$[[$No$,$Transaction,General Journal,Debit,Credit$],[,1,1,$Office equipment,$],[,,$Discount on notes payable,,$],[,,$Cash,,$],[,,$Notes payable,,$]]$