Question

On January 1, 2019, Garcia Corporation purchased a truck by issuing an $80,000, 4-year, non-interesting bearing...

On January 1, 2019, Garcia Corporation purchased a truck by issuing an $80,000, 4-year, non-interesting bearing note to Equinox Inc. The note has a present value of $54,641. The market rate of interest for obligations of this nature is 10%.

Instructions:

  1. Record the journal for the purchase of the equipment.
  2. Record the entry on Dec. 31, 2019 for interest.
  3. Record the entry on De 31, 2020 for interest.

Date

Debit

Credit

Jan. 1

2019

Dec. 31

2019

Dec. 31

2020
Business   Accounting   
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