On January 1, 2000, a company purchased a machine (an operational asset)with a list price of
$4,000.$2,000 was paid in cash and a three-year, noninterest-bearing note was signed.The note was for $3,000 and required payment of equal amounts of $1,000 each December 31, 2000, 2001, and 2002.The going rate of interest was 12%.Using this information, complete the following requirements.
(a)Give the entry on January 1, 2000, to record the purchase of the machine (show computations and round to the nearest dollar):
(b)Prepare the related debt amortization schedule.
(c)Give any adjusting entry related to the note payable required for 2001, assuming the accounting period ends March 31.If none is required, state the reason.
(d)Assuming that the accounting period ends March 31 and there were no reversing entries, give the entry to record the annual payment made on December 31, 2001.

Question

Quizplus · Accepted Answer

The Answer of On January 1, 2000, a company purchased a machine (an operational asset)with a list price of
$4,000.$2,000 was paid in cash and a three-year, noninterest-bearing note was signed.The note was for $3,000 and required payment of equal amounts of $1,000 each December 31, 2000, 2001, and 2002.The going rate of interest was 12%.Using this information, complete the following requirements.
(a)Give the entry on January 1, 2000, to record the purchase of the machine (show computations and round to the nearest dollar):
(b)Prepare the related debt amortization schedule.
(c)Give any adjusting entry related to the note payable required for 2001, assuming the accounting period ends March 31.If none is required, state the reason.
(d)Assuming that the accounting period ends March 31 and there were no reversing entries, give the entry to record the annual payment made on December 31, 2001.

On January 1, 2000, a Company Purchased a Machine (An