Buffalo Limited has been experiencing increased customer demand for its specialty food products. To meet this demand, the comp has bought additional refrigeration units to hold more inventory. To finance this purchase, Buffalo issued a four-year non-interest bearing note, with a face value of $760,000. The prevailing interest rate for similar instruments is 8%. The company agreed to repa the note in four equal instalments. Buffalo used the effective interest method to amortize any premium or discount. the factor table PRESENT VALUE OF 1. the factor table PRESENT VALUE OF AN ANNUITY OF 1. (a) Using (1) factor tables, (2) a financial calculator, or (3) Excel function PV, prepare the journal entry at the date of purchase. (Hint: Refer to Chapter 3 for tips on calculating.) (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answer t O decimal places e.g. 58,971. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Debit Credit
Buffalo Limited has been experiencing increased customer demand for its specialty food products. To meet this demand, the comp has bought additional refrigeration units to hold more inventory. To finance this purchase, Buffalo issued a four-year non-interest bearing note, with a face value of $760,000. The prevailing interest rate for similar instruments is 8%. The company agreed to repa the note in four equal instalments. Buffalo used the effective interest method to amortize any premium or discount. the factor table PRESENT VALUE OF 1. the factor table PRESENT VALUE OF AN ANNUITY OF 1. (a) Using (1) factor tables, (2) a financial calculator, or (3) Excel function PV, prepare the journal entry at the date of purchase. (Hint: Refer to Chapter 3 for tips on calculating.) (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answer t O decimal places e.g. 58,971. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Debit Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Dineshbhai
Transcribed Image Text:Buffalo Limited has been experiencing increased customer demand for its specialty food products. To meet this demand, the compa
has bought additional refrigeration units to hold more inventory. To finance this purchase, Buffalo issued a four-year non-interest-
bearing note, with a face value of $760,000. The prevailing interest rate for similar instruments is 8%. The company agreed to repay
the note in four equal instalments. Buffalo used the effective interest method to amortize any premium or discount.
the factor table PRESENT VALUE OF 1.
the factor table PRESENT VALUE OF AN ANNUITY OF 1.
(a)
Using (1) factor tables, (2) a financial calculator, or (3) Excel function PV, prepare the journal entry at the date of purchase. (Hint:
Refer to Chapter 3 for tips on calculating.) (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answer to
O decimal places e.g. 58,971. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no
entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.)
Account Titles and Explanation
Debit
Credit
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