On September 1,2020,a company purchased a machine and paid for it by signing a two-year noninterest-bearing note,face $4,000.The note is payable August 31,2022.The going rate of interest was 18% per year.The accounting period ends December 31.
(a)Compute the cost of the machine.
(b)Give all appropriate entries throughout the term of the note.
Use the net method.

Question

Quizplus · Accepted Answer

The Answer of On September 1,2020,a company purchased a machine and paid for it by signing a two-year noninterest-bearing note,face $4,000.The note is payable August 31,2022.The going rate of interest was 18% per year.The accounting period ends December 31.
(a)Compute the cost of the machine.
(b)Give all appropriate entries throughout the term of the note.
Use the net method.

On September 1,2020,a Company Purchased a Machine and Paid for It