Cheyenne Corporation issued a 4-year, $31,000, 4% note to Greenbush Company on January 1, 2020, and received a computer that normally sells for $24,268. The note requires annual interest payments each December 31. The market rate of interest for a note of similar risk is 11%. Prepare Cheyenne's journal entries for (a) the January 1 issuance and (b) the December 31 interest.
Cheyenne Corporation issued a 4-year, $31,000, 4% note to Greenbush Company on January 1, 2020, and received a computer that normally sells for $24,268. The note requires annual interest payments each December 31. The market rate of interest for a note of similar risk is 11%. Prepare Cheyenne's journal entries for (a) the January 1 issuance and (b) the December 31 interest.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Cheyenne Corporation issued a 4-year, $31,000, 4% note to Greenbush
Company on January 1, 2020, and received a computer that normally
sells for $24,268. The note requires annual interest payments each
December 31. The market rate of interest for a note of similar risk is
11%.
Prepare Cheyenne's journal entries for (a) the January 1 issuance and
(b) the December 31 interest.
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