Saunders Company purchased equipment by signing a noninterest-bearing note of $21,000 with payment due in three years.
Fantastic news! We've Found the answer you've been seeking!
Question:
Saunders Company purchased equipment by signing a noninterest-bearing note of $21,000 with payment due in three years. The equipment is custom-built, so its cash price is unavailable. Using a rate of 9%, which reflects the appropriate interest rate for a loan of this type of loan, the present value of the note is $16,216.
Prepare the appropriate journal entry to record the purchase of the equipment.
Related Book For
Financial Accounting Tools for Business Decision Making
ISBN: 978-0470239803
5th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Posted Date: