You bought equipment (equipment F) and signed a 6% note in which you agreed to make 48 monthly payments of $1,521 at the end of each month. Record (1) the purchase and (2) the payment at the END of the first month.
You bought equipment (equipment F) and signed a 6% note in which you agreed to make 48 monthly payments of $1,521 at the end of each month. Record (1) the purchase and (2) the payment at the END of the first month.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Mortgages
A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.
Mortgage
The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.
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Need help with Question D
Transcribed Image Text:Your company has acquired several pieces of equipment. Prepare the journal entry for the
following transactions.
You bought NEW equipment (equipment A) which had a market value of $32,000 and
exchanged OLD equipment (equipment B) which cost $50,000, had a book value of
$30,000, and a market value of $28,000 plus you paid $3,000 in cash. This transaction
А.
LACKS commercial substance.
You bought NEW equipment (equipment C) which had a market value of $11,000 and
exchanged OLD equipment (equipment D) which cost $20,000, had a book value of
$12,000, and a market value of $13,000 plus you RECEIVED $2,000 in cash. This
В.
transaction HAS commercial substance.
You bought equipment (equipment E) and paid for it with 3,000 shares of your $10 par
common stock which has a book value of $19 per share and a market value of $26 per
С.
share.
You bought equipment (equipment F) and signed a 6% note in which you agreed to make
48 monthly payments of $1,521 at the end of each month. Record (1) the purchase and
(2) the payment at the END of the first month.
D.
B.
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