A company decides to purchase a new delivery vehicle. The cost, in dollars, is $104,500. They takes out a 5-year "note" to pay for the vehicle, with 4% interest due at the beginning of each year. If I were to journalize this entry, would it be debit to equipment, and credit to accounts receivable for 104,500/5 + 0.04*104500? Or is it credited to something else?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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A company decides to purchase a new delivery vehicle. The cost, in dollars, is $104,500. They takes out a 5-year "note" to pay for the vehicle, with 4% interest due at the beginning of each year.

If I were to journalize this entry, would it be debit to equipment, and credit to accounts receivable for 104,500/5 + 0.04*104500? Or is it credited to something else? 

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