4. On 1/1/21 we sell equipment and accept a 3-year note receivable for $36,500. The market valueis $36,500. Payments of $13,655 include both principal and interest and are to be made annually starting on 1/1/22. The present value of the payments is $36,500. The bank would require the purchaser to pay interest of 6% in order to borrow from them. The equipment cost us $90,000 and had a book value of $40,000. Note: Be sure to show the date of each journal entry. The ʼright' journal entry on the 'wrong' date is wrong. a. Prepare an amortization table b. Prepare the journal entry for 1/1/21 c. Prepare the journal entry for 12/31/21 d. Prepare the journal entry for 1/1/22 Amortization table: Journal entries: Debits Credits 1/1/21 12/31/21 1/1/22
4. On 1/1/21 we sell equipment and accept a 3-year note receivable for $36,500. The market valueis $36,500. Payments of $13,655 include both principal and interest and are to be made annually starting on 1/1/22. The present value of the payments is $36,500. The bank would require the purchaser to pay interest of 6% in order to borrow from them. The equipment cost us $90,000 and had a book value of $40,000. Note: Be sure to show the date of each journal entry. The ʼright' journal entry on the 'wrong' date is wrong. a. Prepare an amortization table b. Prepare the journal entry for 1/1/21 c. Prepare the journal entry for 12/31/21 d. Prepare the journal entry for 1/1/22 Amortization table: Journal entries: Debits Credits 1/1/21 12/31/21 1/1/22
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:4. On 1/1/21 we sell equipment and accept a 3-year note receivable for $36,500.
The market value is $36,500. Payments of $13,655 include both principal and interest
and are to be made annually starting on 1/1/22. The present value of the payments is
$36,500. The bank would require the purchaser to pay interest of 6% in order to
borrow from them. The equipment cost us $90,000 and had a book value of $40,000.
Note: Be sure to show the date of each journal entry. The 'right' journal entry on the 'wrong' date is wrong.
a. Prepare an amortization table
b. Prepare the journal entry for 1/1/21
c. Prepare the journal entry for 12/31/21
d. Prepare the journal entry for 1/1/22
Amortization table:
Journal entries:
Debits
Credits
1/1/21
12/31/21
1/1/22
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