Exercise 10-9 (Algo) Acquisition cost; noninterest-bearing note [LO10-3] On January 1, 2024, Byner Company purchased a used tractor. Byner paid $6,000 down and signed a noninterest-bearing note requiring $43,000 to be paid on December 31, 2026. The fair value of the tractor is not determinable. An interest rate of 12% properly reflects the time value of money for this type of loan agreement. The company's fiscal year-end is December 31. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: 1. Prepare the journal entry to record the acquisition of the tractor. 2. How much interest expense will the company include in its 2024 and 2025 income statements for this note? 3. What is the amount of the liability the company will report in its 2024 and 2025 balance sheets for this note? Complete this question by entering your answers in the tabs below. Req 1 Req 2 and 3 Prepare the journal entry to record the acquisition of the tractor. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your answers to the nearest whole dollars. View transaction list View journal entry worksheet No Transaction 1 1 Tractor General Journal Discount on notes payable Cash Notes payable Ben 1 Reg 2 and 3 > Debit Credit
Exercise 10-9 (Algo) Acquisition cost; noninterest-bearing note [LO10-3] On January 1, 2024, Byner Company purchased a used tractor. Byner paid $6,000 down and signed a noninterest-bearing note requiring $43,000 to be paid on December 31, 2026. The fair value of the tractor is not determinable. An interest rate of 12% properly reflects the time value of money for this type of loan agreement. The company's fiscal year-end is December 31. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: 1. Prepare the journal entry to record the acquisition of the tractor. 2. How much interest expense will the company include in its 2024 and 2025 income statements for this note? 3. What is the amount of the liability the company will report in its 2024 and 2025 balance sheets for this note? Complete this question by entering your answers in the tabs below. Req 1 Req 2 and 3 Prepare the journal entry to record the acquisition of the tractor. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your answers to the nearest whole dollars. View transaction list View journal entry worksheet No Transaction 1 1 Tractor General Journal Discount on notes payable Cash Notes payable Ben 1 Reg 2 and 3 > Debit Credit
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter7: Operating Assets
Section: Chapter Questions
Problem 76APSA
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Question
![Exercise 10-9 (Algo) Acquisition cost; noninterest-bearing note [LO10-3]
On January 1, 2024, Byner Company purchased a used tractor. Byner paid $6,000 down and signed a noninterest-bearing note
requiring $43,000 to be paid on December 31, 2026. The fair value of the tractor is not determinable. An interest rate of 12% properly
reflects the time value of money for this type of loan agreement. The company's fiscal year-end is December 31.
Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
Required:
1. Prepare the journal entry to record the acquisition of the tractor.
2. How much interest expense will the company include in its 2024 and 2025 income statements for this note?
3. What is the amount of the liability the company will report in its 2024 and 2025 balance sheets for this note?
Complete this question by entering your answers in the tabs below.
Req 1
Req 2 and 3
Prepare the journal entry to record the acquisition of the tractor.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round
intermediate calculations. Round your answers to the nearest whole dollars.
View transaction list View journal entry worksheet
No
Transaction
1
1
Tractor
General Journal
Discount on notes payable
Cash
Notes payable
Ben 1
Reg 2 and 3 >
Debit
Credit](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F22e6d251-1c54-4e34-b492-727039851b0a%2F31f3a82b-8680-4103-9ec6-3d45771ac592%2Filqnlgd_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exercise 10-9 (Algo) Acquisition cost; noninterest-bearing note [LO10-3]
On January 1, 2024, Byner Company purchased a used tractor. Byner paid $6,000 down and signed a noninterest-bearing note
requiring $43,000 to be paid on December 31, 2026. The fair value of the tractor is not determinable. An interest rate of 12% properly
reflects the time value of money for this type of loan agreement. The company's fiscal year-end is December 31.
Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
Required:
1. Prepare the journal entry to record the acquisition of the tractor.
2. How much interest expense will the company include in its 2024 and 2025 income statements for this note?
3. What is the amount of the liability the company will report in its 2024 and 2025 balance sheets for this note?
Complete this question by entering your answers in the tabs below.
Req 1
Req 2 and 3
Prepare the journal entry to record the acquisition of the tractor.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round
intermediate calculations. Round your answers to the nearest whole dollars.
View transaction list View journal entry worksheet
No
Transaction
1
1
Tractor
General Journal
Discount on notes payable
Cash
Notes payable
Ben 1
Reg 2 and 3 >
Debit
Credit
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