Webb Corporation purchased equipment from Shaw Corporation on January 1, 2019. Shaw accepted a 3-year, non-interest-bearing note of $18,000 due December 31, 2021, in exchange for the equipment. Neither the fair value of the equipment nor that of the note is available. Webb’s incremental borrowing rate is 12%. Required: Prepare the journal entries to record the issuance of the note, retirement, and any interest expense on the books of Webb on each of the following dates: 1. January 1, 2019 2. December 31, 2019 3. December 31, 2020 4. December 31, 2021
Webb Corporation purchased equipment from Shaw Corporation on January 1, 2019. Shaw accepted a 3-year, non-interest-bearing note of $18,000 due December 31, 2021, in exchange for the equipment. Neither the fair value of the equipment nor that of the note is available. Webb’s incremental borrowing rate is 12%. Required: Prepare the journal entries to record the issuance of the note, retirement, and any interest expense on the books of Webb on each of the following dates: 1. January 1, 2019 2. December 31, 2019 3. December 31, 2020 4. December 31, 2021
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Webb Corporation purchased equipment from Shaw Corporation on January 1, 2019. Shaw accepted a 3-year, non-interest-bearing note of $18,000 due December 31, 2021, in exchange for the equipment. Neither the fair value of the equipment nor that of the note is available. Webb’s incremental borrowing rate is 12%.
Required:
| Prepare the |
| 1. | January 1, 2019 |
| 2. | December 31, 2019 |
| 3. | December 31, 2020 |
| 4. | December 31, 2021 |
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