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d. December 31, Year 3-Interest payment. Date Dec. 31, Year 3 Account Name Date Dec. 31, Year 3 To record interest payment. e. December 31, Year 3-Note payment at maturity. Account Name To record interest payment. Debit Debit O 0 0 0 0 Credit Credit 0 0 0 0 0

d. December 31, Year 3-Interest payment. Date Dec. 31, Year 3 Account Name Date Dec. 31, Year 3 To record interest payment. e. December 31, Year 3-Note payment at maturity. Account Name To record interest payment. Debit Debit O 0 0 0 0 Credit Credit 0 0 0 0 0

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 10MC: On January 1, 2019, Park Company accepted a 36,000, non-interest-bearing, 3-year note from a major...
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d. December 31, Year 3-Interest payment. Date Dec. 31, Year 3 Account Name Date Dec. 31, Year 3 To record interest payment. e. December 31, Year 3-Note payment at maturity. Account Name To record interest payment. Debit Debit 0 0 0 0 0 Credit Credit 0 0 0 0 0
Transcribed Image Text:d. December 31, Year 3-Interest payment. Date Dec. 31, Year 3 Account Name Date Dec. 31, Year 3 To record interest payment. e. December 31, Year 3-Note payment at maturity. Account Name To record interest payment. Debit Debit 0 0 0 0 0 Credit Credit 0 0 0 0 0
On January 1 of Year 1, Jet Air Inc. contracted with Systems Plus Inc. to manufacture equipment. Jet Air Inc. issued a $82,500 note to Systems Plus Inc. in exchange for the equipment. The note requires 5% interest payments annually over 3 years on December 31 of each year. Although the fair value of the equipment is not reasonably determinable, it was determined that 10% was a reasonable rate of interest for such a transaction. Provide journal entries to be made by Jet Air Inc. at each of the following dates. • Note: Round your answers to the nearest whole dollar. a. January 1, Year 1-Note issuance. Date Jan. 1, Year 1 Date Dec. 31, Year 1 Account Name b. December 31, Year 1-Interest payment. To record note issuance. Date Dec. 31, Year 2 Account Name To record interest payment. c. December 31, Year 2-Interest payment. Account Name To record interest payment. Debit Debit Debit 0 0 0 0 0 0 0 0 0 Credit 0 0 0 Credit Credit 0 0 0 0 0 0
Transcribed Image Text:On January 1 of Year 1, Jet Air Inc. contracted with Systems Plus Inc. to manufacture equipment. Jet Air Inc. issued a $82,500 note to Systems Plus Inc. in exchange for the equipment. The note requires 5% interest payments annually over 3 years on December 31 of each year. Although the fair value of the equipment is not reasonably determinable, it was determined that 10% was a reasonable rate of interest for such a transaction. Provide journal entries to be made by Jet Air Inc. at each of the following dates. • Note: Round your answers to the nearest whole dollar. a. January 1, Year 1-Note issuance. Date Jan. 1, Year 1 Date Dec. 31, Year 1 Account Name b. December 31, Year 1-Interest payment. To record note issuance. Date Dec. 31, Year 2 Account Name To record interest payment. c. December 31, Year 2-Interest payment. Account Name To record interest payment. Debit Debit Debit 0 0 0 0 0 0 0 0 0 Credit 0 0 0 Credit Credit 0 0 0 0 0 0
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