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On December 31, 2025, Cullumber Company acquired a computer from Plato Corporation by issuing a $614,000.00 zero-interest bearing note, payable in full on December 31, 2029. Cullumber 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 $76,000 salvage value.

On December 31, 2025, Cullumber Company acquired a computer from Plato Corporation by issuing a $614,000.00 zero-interest bearing note, payable in full on December 31, 2029. Cullumber 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 $76,000 salvage value.

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
Chapter20: Accounting For Leases
Section: Chapter Questions
Problem 10MC: On August 1, 2019, Kern Company leased a machine to Day Company for a 6-year period requiring...
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On December 31, 2025, Cullumber Company acquired a computer from Plato Corporation by issuing a $614,000.00 zero-interest- bearing note, payable in full on December 31, 2029. Cullumber 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 $76,000 salvage value. Click here to view factor tables. (a) Prepare the journal entry for the purchase on December 31, 2025. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to 2 decimal places, eg. 58,971.23. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Date Account Titles and Explanation December 31,2025 eTextbook and Media List of Accounts Debit Credit
Transcribed Image Text:On December 31, 2025, Cullumber Company acquired a computer from Plato Corporation by issuing a $614,000.00 zero-interest- bearing note, payable in full on December 31, 2029. Cullumber 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 $76,000 salvage value. Click here to view factor tables. (a) Prepare the journal entry for the purchase on December 31, 2025. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to 2 decimal places, eg. 58,971.23. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Date Account Titles and Explanation December 31,2025 eTextbook and Media List of Accounts Debit Credit
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Prepare any necessary adjusting entries relative to depreciation (use straight-line) and amortization (use effective-interest method) on December 31, 2026. (Round answers to 2 decimal places, e.g. 38,548.23. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Date Account Titles and Explanation December 31, 2026 December (To record the depreciation.) 31, 2026 Date 12/31/25 12/31/26 12/31/27 12/31/28 12/31/29 (To amortize the discount.) Schedule of Note Discount Amortization Debit Interest Expense / Credit Discount on Notes Payable Carrying Value of Note $ $ Debit Credit
Transcribed Image Text:Prepare any necessary adjusting entries relative to depreciation (use straight-line) and amortization (use effective-interest method) on December 31, 2026. (Round answers to 2 decimal places, e.g. 38,548.23. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Date Account Titles and Explanation December 31, 2026 December (To record the depreciation.) 31, 2026 Date 12/31/25 12/31/26 12/31/27 12/31/28 12/31/29 (To amortize the discount.) Schedule of Note Discount Amortization Debit Interest Expense / Credit Discount on Notes Payable Carrying Value of Note $ $ Debit Credit
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