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
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter22: Providing And Obtaining Credit
Section: Chapter Questions
Problem 3P: Del Hawley, owner of Hawleys Hardware, is negotiating with First City Bank for a 1-year loan of...
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![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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbe14fc7e-c7f7-4f40-88d7-9aaf69dc35a7%2F2bf119a0-84c0-4a3f-b2ba-fc69a398214c%2F9tjqd79_processed.png&w=3840&q=75)
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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