Sandhill Inc. decided to purchase equipment from Central Ontario Industries on January $2,2023,$ to expand its production capacity to meet customers$$ demand for its product. Sandhill issued a $$906,000,6-$year, non$$interest$-$bearing note to Central Ontario for the new equipment when the prevailing market interest rate for obligations of this nature was $11\%.$ The company will pay off the note in $6$ $$151,000$ instalments due at the end of each year of the note$$s life.

Prepare the journal entries at the end of the first year to record the payment of principal and interest, assuming that the company uses the effective interest method. For Jan $2,$ there are $3$ titles for the entry.

Answer rating: 100% (QA)

Sure here are the journal entries 1 January 2 2023 ... View the full answer