On December 31, 2025, Cullumber Company acquired a computer from Plato Corporation by issuing a $614,000.00 zero-interest-bearing note, payable in full on December 31, 2029. Cullumber Company's credit rating permits it to borrow funds from its severallines of credit at 10%. The computer is expected to have a 5-year life and a $76,000 salvage value.Click here to view factor tables.(a)Prepare the journal entry for the purchase on December 31, 2025. (Round present value factor calculations to 5 decimal places, e.g.1.25124 and the final answers to 2 decimal places, eg. 58,971.23. If no entry is required, select "No Entry" for the account titles and enterO for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debitentries before credit entries.)DateAccount Titles and ExplanationDecember31,2025eTextbook and MediaList of AccountsDebitCredit

A record is frequently recorded in the major ledger; however, it may alternatively be entered in a…

On December 31, 2025, Cullumber Company acquired a computer from Plato Corporation by issuing a $614,000.00 zero-interest bearing note, payable in full on December 31, 2029. Cullumber Company's credit rating permits it to borrow funds from its several lines of credit at 10%. The computer is expected to have a 5-year life and a $76,000 salvage value.

On December 31, 2025, Cullumber Company acquired a computer from Plato Corporation by issuing a $614,000.00 zero-interest bearing note, payable in full on December 31, 2029. Cullumber Company's credit rating permits it to borrow funds from its several lines of credit at 10%. The computer is expected to have a 5-year life and a $76,000 salvage value.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Leasing

Leasing is a contractual arrangement in which someone (a lessee) pays the owner (or lessor) of a building, land, vehicle, or other asset for the use of that asset. The lease is the agreement between lessee and lessor.

Question

On December 31, 2025, Cullumber Company acquired a computer from Plato Corporation by issuing a $614,000.00 zero-interest-
bearing note, payable in full on December 31, 2029. Cullumber Company's credit rating permits it to borrow funds from its several
lines of credit at 10%. The computer is expected to have a 5-year life and a $76,000 salvage value.
Click here to view factor tables.
(a)
Prepare the journal entry for the purchase on December 31, 2025. (Round present value factor calculations to 5 decimal places, e.g.
1.25124 and the final answers to 2 decimal places, eg. 58,971.23. If no entry is required, select "No Entry" for the account titles and enter
O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit
entries before credit entries.)
Date
Account Titles and Explanation
December
31,2025
eTextbook and Media
List of Accounts
Debit
Credit

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Follow-up Question

Prepare any necessary adjusting entries relative to depreciation (use straight-line) and amortization (use effective-interest
method) on December 31, 2026. (Round answers to 2 decimal places, e.g. 38,548.23. If no entry is required, select "No Entry" for the
account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent
manually. List all debit entries before credit entries.)
Date
Account Titles and Explanation
December
31, 2026
December
(To record the depreciation.)
31, 2026
Date
12/31/25
12/31/26
12/31/27
12/31/28
12/31/29
(To amortize the discount.)
Schedule of Note Discount Amortization
Debit Interest Expense / Credit Discount
on Notes Payable
Carrying Value
of Note
$
$
Debit
Credit

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