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On December 31, 2015, Malone Company acquired a computer from Holly Corporation by issuing a $600,000...

On December 31, 2015, Malone Company acquired a computer from Holly Corporation by issuing a $600,000 zero-interest-bearing note, payable in full on December 31, 2019. Malone Company’s credit rating permits it to borrow funds from its several lines of credit at 10%. The computer is expected to have a 5-year life and a $70,000 residual value.
Prepare the journal entry for the purchase on December 31, 2015 and any necessary adjusting entries relative to depreciation (use straight-line) and amortization on December 31, 2016.
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