On September 1, 20X1, Chabon Corp. purchased machinery costing $20,000 by issuing a 12-month, 12%, promissory note to the seller. The note's principal plus interest will be paid when the note matures on September 1, 20X2. Interest calculations are rounded to the nearest whole month. Required: Record the September 1, 20X1 transaction, the year-end adjustment for interest, and the loan repayment on September 1, 20X2.
On September 1, 20X1, Chabon Corp. purchased machinery costing $20,000 by issuing a 12-month, 12%, promissory note to the seller. The note's principal plus interest will be paid when the note matures on September 1, 20X2. Interest calculations are rounded to the nearest whole month. Required: Record the September 1, 20X1 transaction, the year-end adjustment for interest, and the loan repayment on September 1, 20X2.
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 1PB: Sub-Cinema Inc. borrowed $10,000 on Jan. 1 and will repay the loan with 12 equal payments made at...
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On September 1, 20X1, Chabon Corp. purchased machinery costing $20,000 by issuing a 12-month, 12%, promissory note to the seller.
The note's principal plus interest will be paid when the note matures on September 1, 20X2. Interest calculations are rounded to the nearest whole month.
Required: Record the September 1, 20X1 transaction, the year-end adjustment for interest, and the loan repayment on September 1, 20X2.
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