On July 1, 2017, Snow Corp purchases a sleigh (property, plant, and equipment) and agrees to make 10 payments of $6,790 due on December 31 of each year. The annual market interest rate for the note is 5%. All adjusting journal entries are recorded on December 31. Assume that Snow Corp uses the double- declining method to record depreciation. The sleigh is estimated to have a useful life of 20 years and a salvage value of $700. Use the above information to answer the following questions. Round your answer to 2 decimal places.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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On July 1, 2017, Snow Corp purchases a sleigh (property, plant, and equipment) and agrees to make 10
payments of $6,790 due on December 31 of each year. The annual market interest rate for the note is 5%.
All adjusting journal entries are recorded on December 31. Assume that Snow Corp uses the double-
declining method to record depreciation. The sleigh is estimated to have a useful life of 20 years and a
salvage value of $700. Use the above information to answer the following questions. Round your answer to
2 decimal places.
Present value of a single sum for 5 periods
Present value of a single sum for 10 periods
Present value of an annuity for 5 periods
Present value of an annuity for 10 periods
2.5%
.88385
78120
4.64583
8.75206
3.0%
.86261
.74409
4.57971
8.53020
5.0%
.78353
.61391
4.32948
7.72173
6.0%
.74726
.55839
4.21236
7.36009
What is the journal entry(ies) recorded by Snow Corp on July 1, 2017? Write "NONE" if no journal entry is
required.
Transcribed Image Text:On July 1, 2017, Snow Corp purchases a sleigh (property, plant, and equipment) and agrees to make 10 payments of $6,790 due on December 31 of each year. The annual market interest rate for the note is 5%. All adjusting journal entries are recorded on December 31. Assume that Snow Corp uses the double- declining method to record depreciation. The sleigh is estimated to have a useful life of 20 years and a salvage value of $700. Use the above information to answer the following questions. Round your answer to 2 decimal places. Present value of a single sum for 5 periods Present value of a single sum for 10 periods Present value of an annuity for 5 periods Present value of an annuity for 10 periods 2.5% .88385 78120 4.64583 8.75206 3.0% .86261 .74409 4.57971 8.53020 5.0% .78353 .61391 4.32948 7.72173 6.0% .74726 .55839 4.21236 7.36009 What is the journal entry(ies) recorded by Snow Corp on July 1, 2017? Write "NONE" if no journal entry is required.
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