On August 31 2021 Company Abc Purchased A New Machine From Xyz The Agreement Stipulated That Abc Make Four Payments O 1 (91.81 KiB) Viewed 18 times
On August 31, 2021. Company ABC purchased a new machine from XYZ. The agreement stipulated that ABC make four payments of $75,000 (including interest) annually August 31. The first note payment is to be made on August 31, 2021. Assume that a market interest rate of 5% applies to this contract: Present value of an Future value of an ordinary annuity Future Value of 1 Present value of 1 Present value of an ordinary annuity 3.54595 annuity due n i 1.21551 0.82270 431013 3.72325 59 1. Record Company ABC's purchase of the machine on August 31, 2021? (6pts) Account Title Debit Credit 2. Prepare the journal entry(s) for Company ABC for year ended 12/31/23, if any, associated with the purchase of this equipment. (3 pts)
2. Prepare the journal entry(s) for Company ABC for year ended 12/31/23, if any, associated with the purchase of this equipment. (3 pts) Account Title Debit Credit 3. Record Company ABC's payment on the note for August 31, 2023 if the company does not make reversing entries? (3pts) Account Title Debit Credit 4. What is the total interest expense ABC will incur over the life of this note? (2pts) For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac).
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