Rashford Inc. financed the purchase of equipment costing $480000 on April 1, 2022, by making a down payment of $120000 in cash and using an installment note payable for the balance. The note requires the company to make monthly payments of blended interest and principal on the first of each month (starting in the month after the purchase) for the following 5 years. The note bears interest at the rate of 5% per annum. The company reports under ASPE and its year-end is July 31. 1. Prepare the journal entries that are required for the 2022 fiscal year from the beginning of the term of the note plus the first payment entry after the company's year-end.
Rashford Inc. financed the purchase of equipment costing $480000 on April 1, 2022, by making a down payment of $120000 in cash and using an installment note payable for the balance. The note requires the company to make monthly payments of blended interest and principal on the first of each month (starting in the month after the purchase) for the following 5 years. The note bears interest at the rate of 5% per annum. The company reports under ASPE and its year-end is July 31. 1. Prepare the journal entries that are required for the 2022 fiscal year from the beginning of the term of the note plus the first payment entry after the company's year-end.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Rashford Inc. financed the purchase of equipment costing $480000 on April 1, 2022, by making a down payment of $120000 in cash and using an installment note payable for the balance. The note requires the company to make monthly payments of blended interest and principal on the first of each month (starting in the month after the purchase) for the following 5 years. The note bears interest at the rate of 5% per annum. The company reports under ASPE and its year-end is July 31.
1. Prepare the
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