Issued a 4-year $40,000 5% note on January 1 for a computer that sells for $31,495. The note requires annual interest payments. The market rate of interest for a note of this risk is 12%. Prepare journal entries for the note for the issuance and the first interest payment.

Issued a 4-year $40,000 5% note on January 1 for a computer that sells for $31,495. The note requires annual interest payments. The market rate of interest for a note of this risk is 12%. Prepare journal entries for the note for the issuance and the first interest payment.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 21MC: A customer takes out a loan of $130,000 on January 1, with a maturity date of 36 months, and an...

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3. Issued a 4-year $40,000 5% note on January 1 for a computer that sells for $31,495. The note
requires annual interest payments. The market rate of interest for a note of this risk is 12%.
Prepare journal entries for the note for the issuance and the first interest payment.

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