On December 1, 2024, Microsoft Corporation purchased a newcloud computing server farm for $15 million. The company paid$3 million in cash and financed the remaining $12 million with a5-year loan at an annual interest rate of 4%, with interest payableannually on December 1. The server farm is expected to have auseful life of 7 years with no salvage value. Microsoft uses thestraight-line method for depreciation. Additionally, the companyincurred $500,000 in installation and testing costs, which werepaid in cash. Record the journal entries for: The purchase andfinancing of the server farm The payment of installation andtesting costs The adjusting entry for depreciation on December31, 2024 The adjusting entry for accrued interest on December31, 2024

Question 1: Journal Entry for the Purchase and Financing of the Server FarmAnswer PartDr. Server…

Answered: On December 1, 2024, Microsoft…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 14P

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